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Dallas, Houston, and San Antonio.
−Removed: Southwest’s unique route network, low fares, and famous Hospitality continue to make the Company an attractive choice for Customers in cities across the United States and near-international destinations.
+Added: Southwest’s unique route network, competitive fares, and famous Hospitality continue to make the Company an attractive choice for Customers in cities across the United States and near-international destinations.
As of December 31, 2025, Southwest had a total of 803 Boeing 737 aircraft in its fleet and served 117 destinations in 42 states, the District of Columbia, the Commonwealth of Puerto Rico, and ten near-international countries:
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Company Initiatives
−Removed: As part of the Company's ongoing modernization efforts, during third quarter 2024, the Company announced several transformational initiatives designed to elevate the Customer Experience on its flights, improve financial performance, and drive Shareholder value, including:
−Removed: • Assigned Seating :
−Removed: Southwest will introduce an assigned seating model to better align with airline passenger preferences.
−Removed: The Company expects to begin selling assigned seats in the second half of 2025, with its first flights operating with the new seating model in the first half of 2026.
−Removed: • Premium Seating :
−Removed: Southwest will offer extra legroom options with additional pitch while maintaining a standard economy seat pitch.
+Added: As part of the Company's ongoing modernization efforts, the Company is executing several transformational initiatives designed to elevate the Customer Experience on its flights, improve financial performance, and drive Shareholder value, including:
+Added: • Assigned and Extra Legroom Seating :
+Added: On January 27, 2026, Southwest began operating assigned and extra legroom seating to better align with airline passenger preferences.
+Added: Passengers can now choose between a standard seat, a preferred seat near the front of the cabin, or an extra legroom seat with additional pitch.
• Redesigned Boarding Model :
−Removed: Southwest will evolve its boarding process with seat assignments while focusing on operational efficiency and improving the Customer Experience.
−Removed: The updated boarding process will be designed to maintain Southwest's unique and popular approach in boarding through position numbers and signage displayed on stanchions within the gate area.
+Added: Southwest evolved its boarding process beginning January 27, 2026, by prioritizing Customers into boarding groups based on seat location, fare bundle, and loyalty program status, beginning with extra legroom seats in boarding groups 1 and 2 .
• Global Airline Partnerships :
−Removed: Southwest is seeking partnerships with international carriers to expand its network and connect Customers with more global destinations to generate additional demand for travel across the Southwest network.
−Removed: Icelandair will become Southwest's initial partner with an expected launch on February 13, 2025 through Baltimore-Washington International Airport, which will serve as its first U.S.
−Removed: gateway for the carriers.
−Removed: The Icelandair partnership is expected to add Denver and Nashville gateways during 2025, and Southwest intends to add at least one additional partner carrier in 2025.
+Added: In 2025, Southwest launched its first partnerships with international carriers to expand its network and connect Customers with more global destinations to generate additional demand for travel across the Southwest network.
• Getaways by Southwest™ :
−Removed: In 2025, Southwest intends to launch a new product, Getaways by Southwest, offering vacation packages that are unique to the industry and come with Customer-friendly policies.
−Removed: These customizable vacation bundles are expected to feature Southwest's generous cancellation policy and flexibility with its no change fees for flights extending to hotels and other elements of packaged vacations.
+Added: Southwest launched a new in-house vacation product, Getaways by Southwest (“Getaways”), in August 2025 to offer customizable vacation packages that come with Customer-friendly policies including a generous cancellation policy and flexibility with no change fees.
• 24-Hour Operations :
−Removed: Southwest is scheduled to add 24-hour operation capabilities with the introduction of overnight (i.e., redeye) flights on February 13, 2025 in key markets to maximize aircraft utilization.
+Added: In 2025, Southwest added 24-hour operation capabilities with the introduction of overnight (i.e., redeye) flights in key markets to maximize aircraft utilization.
+Added: The Company intends to expand redeye flights to additional markets in 2026.
• Marketing & Distribution Evolution :
−Removed: In order to attract new Customers and reach them where they are performing travel searches today, Southwest has expanded into new channels such as Google Flights, Kayak, and Skyscanner to broaden its Customer base and begin to engage them in its loyalty program.
−Removed: • Service Modernization :
−Removed: To drive efficiency and improvement in Customer Service, Southwest is transitioning to a digital-first model, offering more self-service options designed to augment the Company’s contact centers and airport experience.
+Added: In order to attract new Customers and reach them where they are performing travel searches today, Southwest expanded into new channels such as Expedia, Priceline, Google Flights, Kayak, and Skyscanner to broaden its Customer base and begin to engage them in its loyalty program.
Company Operations
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By contrast, the hub-and-spoke system concentrates most of an airline's operations at a limited number of central hub cities and serves most other destinations in the system by providing one-stop or connecting service through a hub.
−Removed: By not concentrating operations exclusively through one or more central transfer points, Southwest's route structure has allowed for more direct nonstop routing than a traditional hub-and-spoke service.
+Added: By not concentrating operations exclusively through one or more central transfer points,
+Added: Southwest's route structure has allowed for more direct nonstop routing than a traditional hub-and-spoke service.
To provide greater connectivity and support operational reliability and recoverability, in recent years the Company has increasingly focused on designing its network around core stations.
−Removed: Southwest’s unique network blends intentional connectivity offered by hub-and-spoke models and point-to-point nonstops, allowing the Company to capture nonstop demand and provide reliable one-stop itinerary options.
−Removed: Southwest’s unique route network has also enabled it to provide its markets with frequent, conveniently timed flights and low fares.
−Removed: For example, Southwest currently offers 12 weekday roundtrips between Dallas Love Field and Houston Hobby, six weekday roundtrips between Denver and Chicago Midway, six weekday roundtrips between Los Angeles International and Las Vegas, eight weekday round trips between Burbank and Oakland, and ten weekday roundtrips between Phoenix and Denver.
−Removed: Southwest complements its high-frequency short-haul routes with mid-range and long-haul nonstop service, including flights between Hawaii and California, Las Vegas, and Phoenix, and between markets such as Los Angeles and Nashville, New York LaGuardia and Houston, Los Angeles and Baltimore, Oakland and Houston, and San Diego and Baltimore.
−Removed: In 2024, the United States Department of Transportation (“DOT”) approved the Company’s bid to offer nonstop round-trip flights between Las Vegas and Washington Reagan.
−Removed: Service between Las Vegas and Washington Reagan begins February 13, 2025, with daily service beginning March 6, 2025.
−Removed: As the domestic travel market has matured and structural changes have reduced the demand for short-haul travel, especially post-pandemic, the Company has increased its proportion of longer-haul flights.
−Removed: Further, during 2024, the Company announced 24-hour operation capabilities with the introduction of redeye flights.
−Removed: Booking of redeye flying on initial routes became available in July 2024, with the first redeye flights scheduled on February 13, 2025, in five initial nonstop markets:
−Removed: Las Vegas to Baltimore and Orlando;
−Removed: Los Angeles to Baltimore and Nashville;
−Removed: and Phoenix to Baltimore.
+Added: By blending intentional connectivity offered by hub-and-spoke models and point-to-point nonstops, the Company is able to capture nonstop demand and provide reliable one-stop itinerary options.
+Added: Southwest’s unique route network has also enabled it to provide its markets with frequent, conveniently timed flights and competitive fares.
+Added: For example, Southwest offers up to 12 weekday roundtrips between Dallas Love Field and Houston Hobby, 12 weekday roundtrips between Sacramento and San Diego, 12 weekday roundtrips between San Diego and San Jose, 12 weekday round trips between Las Vegas and San Diego, and 11 weekday roundtrips between Las Vegas and Sacramento.
+Added: Southwest complements its high-frequency short-haul routes with mid-range and long-haul nonstop service, including flights between Hawaii and California, Las Vegas, and Phoenix, and between markets such as Las Vegas and Washington Reagan, Los Angeles and Nashville, New York LaGuardia and Houston, Los Angeles and Baltimore, Oakland and Houston, and San Diego and Baltimore.
+Added: As the domestic travel market has matured and structural changes have reduced the demand for short-haul travel, the Company has increased its proportion of longer-haul flights.
+Added: Further, the Company introduced 24-hour operation capabilities in 2025 with the commencement of redeye flights.
+Added: Southwest now offers over 50 peak-day redeye flights during peak periods and includes flights across the continental United States and from Hawaii to the U.S.
+Added: mainland, with plans to offer flights from Alaska to the U.S.
+Added: mainland in 2026.
The table below sets forth data regarding the Company's nonstop service, aircraft stage length, and trip duration over the last three years:
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The Company continually works to better optimize its route network and schedule through the adjustment of flights in its existing markets and the addition of new markets and itineraries, while also pruning less profitable flights from its schedule.
−Removed: During 2024, the Company sought to restructure and better optimize its network to better match capacity to demand and adjust for post-pandemic Customer travel patterns by reducing short-haul trips, redistributing resources to longer-haul trips in more profitable markets, and reducing flying on weekdays and at off-peak times with lower travel demand.
−Removed: In response to market conditions, the Company ceased service at Cozumel, Mexico;
−Removed: Houston Bush Intercontinental;
−Removed: and Bellingham in 2024.
−Removed: Further, the Company redeployed underperforming capacity by significantly reducing service at Atlanta, Fort Lauderdale, and Chicago O’Hare, while expanding service at Nashville.
−Removed: The Company is continuing to improve the connectivity and efficiency of its network through redesigns in smaller cities and the planned introduction of redeye flying.
−Removed: Additionally, the Company is taking a cross-functional, methodical approach to market maturation efforts.
+Added: During 2025, the Company focused on expanding its network, announcing service at five new locations beginning in 2026, including Cyril E.
+Added: King International Airport in St.
+Added: McGhee Tyson Airport in Knoxville, Tennessee;
+Added: Ted Stevens Anchorage International Airport in Alaska;
+Added: Schulz Sonoma County Airport in Santa Rosa, California;
+Added: and Princess Juliana International Airport in St.
+Added: Additionally, the Company launched partnerships with six international airlines to provide Customers access to more global destinations.
+Added: The Company’s partnerships with international carriers have improved its international connectivity with its domestic network.
+Added: The Company also sought to enhance connectivity and better optimize its network to match capacity to demand and adjust for Customer travel patterns by reducing short-haul trips, redistributing resources to longer-haul trips in more profitable markets, and reducing flying on weekdays and at off-peak times with lower travel demand.
+Added: In response to market conditions, the Company redeployed underperforming capacity by significantly reducing service at Atlanta and Fort Lauderdale, while expanding service at Nashville and San Diego.
+Added: The Company is continuing to improve the connectivity and efficiency of its network through redesigns in smaller cities and the introduction of redeye flying.
The Company’s unique route network allows for these adjustments without structurally disrupting its airports in core markets and other large cities.
−Removed: To further improve international connectivity with its domestic network, as discussed under “Company Initiatives,” the Company is scheduled to begin operating as a partner with Icelandair on February 13, 2025 to provide for transatlantic connectivity and announced plans to add at least one more partner during 2025.
Cost Structure
−Removed: A key component of the Company's business strategy is its focus on cost discipline and charging competitively low fares.
−Removed: The Company's low-cost strategy includes, among other elements, (i) the use of a single aircraft type, the Boeing 737, and (ii) the Company's route structure.
−Removed: Southwest's use of a single aircraft type has historically allowed for simplified scheduling, maintenance, flight operations, safety management, and training activities.
−Removed: Southwest's route structure includes service to and from many secondary or downtown airports such as Dallas Love Field, Houston Hobby, Chicago Midway, Baltimore-Washington International, Burbank, Manchester, Oakland, San Jose, and Providence.
+Added: A key component of the Company's business strategy is its focus on cost discipline and charging competitive fares.
+Added: The Company's low-cost strategy includes, among other elements, the Company's route structure, which includes
+Added: service to and from many secondary or downtown airports such as Dallas Love Field, Houston Hobby, Chicago Midway, Baltimore-Washington International, Burbank, Manchester, Oakland, San Jose, and Providence.
These conveniently located airports are typically less congested than other airlines' hub airports, which has contributed to Southwest's ability to achieve high asset utilization because aircraft can be scheduled to minimize the amount of time they are on the ground.
This, in turn, has reduced the number of aircraft and gate facilities that would otherwise be required and is designed to allow for higher Employee productivity over a long period of time.
+Added: Additionally, Southwest's use of a single aircraft type, the Boeing 737, allows for simplified scheduling, maintenance, flight operations, safety management, and training activities.
Given ever-evolving travel patterns and labor market challenges, the Company continues to focus on better optimizing its route network, improving operational efficiency and reliability, and increasing Employee productivity.
−Removed: The Company expects to further increase asset utilization through its introduction of redeye flights and its initiatives to decrease the amount of time it takes to turn an aircraft (the time needed to unload Passengers from an arriving flight and load Passengers on the same aircraft for its subsequent flight).
−Removed: Such investments include moving to a fully digital (i.e., paperless) process, improved communication tools for Employees, and better visual and real-time information to assist both Customers and Employees.
−Removed: These initiatives are designed to lower unit costs, as the Company is expected to be able to generate either the same number of available seat miles (“ASMs”) with fewer aircraft or produce more ASMs utilizing the same number of aircraft in its fleet.
−Removed: These efforts are underway and are scheduled to be fully implemented by November 2025.
−Removed: In addition, the Company is targeting other cost savings initiatives, including capitalizing on identified supply chain opportunities and improving its corporate efficiency through automation and better allocation of resources.
−Removed: The Company's focus on controlling costs also includes a continued commitment to pursuing, implementing, and enhancing initiatives to reduce fuel consumption and improve fuel efficiency (ASMs per fuel gallon consumed).
−Removed: The Company focuses on minimizing fuel consumption and improving fuel efficiency through fleet modernization and other fuel initiatives.
−Removed: For example, in 2024, the Company added 22 Boeing 737 MAX 8 (“-8”) aircraft to its fleet, with the goal of lowering operating costs, improving potential growth opportunities, better optimizing the Company's network, reducing carbon emissions per ASM, and further modernizing the Company's fleet with more fuel-efficient aircraft.
+Added: In 2025, the Company increased asset utilization through its introduction of redeye flights and its initiatives to decrease the amount of time it takes to turn an aircraft (the time needed to unload Passengers from an arriving flight and load Passengers on the same aircraft for its subsequent flight).
+Added: Such investments included moving to a digital (i.e., paperless) process, improving communication tools for Employees, and launching better visual and real-time information to assist both Customers and Employees.
+Added: Key initiatives have been fully implemented and are designed to lower unit costs, as the Company is expected to be able to, at a minimum, generate the same number of available seat miles (“ASMs”) with fewer aircraft.
+Added: In addition, the Company continues to target other cost savings initiatives, including capitalizing on identified supply chain opportunities and improving its corporate efficiency through automation and better allocation of resources.
+Added: Fuel and Fleet
Fuel and oil expense can be extremely volatile and unpredictable, and even a small change in market fuel prices can significantly affect profitability.
−Removed: Although the Company’s jet fuel prices per gallon were generally lower in 2024, as compared with 2023, they remain at high levels.
−Removed: Fuel and oil expense remained the Company's second largest operating cost category for 2024.
+Added: Although the Company’s jet fuel prices per gallon were generally lower in 2025, as compared with 2024, Fuel and oil expense remained the Company's second largest operating cost category for 2025.
As evidenced by the table below, energy prices can fluctuate significantly in a relatively short amount of time.
+Added: Based on higher fuel hedging premium costs over time and other factors, during second quarter 2025, the Company terminated its remaining portfolio of fuel hedging contracts, which were scheduled to settle through 2027, to effectively close its fuel hedging portfolio and program.
+Added: The risks associated with high and/or volatile fuel prices are discussed in more detail below under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 10 to the Consolidated Financial Statements.
The table below shows the Company's average cost of jet fuel inclusive of fuel taxes and fuel hedging impacts, for each year beginning in 2011 and during each quarter of 2025.
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2024 $ 5,812 $ 2.64 21.4 %
+Added: 2025 $ 5,240 $ 2.41 19.0 %
First Quarter 2025 $ 1,249 $ 2.49 18.8 %
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Fourth Quarter 2025 $ 1,333 $ 2.45 18.9 %
−Removed: The Company’s fuel efficiency was aided in 2024, as compared with 2023, through the addition of 22 -8 aircraft to its fleet and by the retirement of 34 of its oldest, least fuel-efficient Boeing 737-700 (“-700”) aircraft and the retirement of two Boeing 737-800 ("-800") aircraft.
−Removed: As of December 31, 2024, the Company had 245 -8 aircraft in its fleet.
−Removed: In second and fourth quarter 2024, the Company entered into supplemental agreements (the “Supplements”) to its purchase agreement with The Boeing Company (“Boeing”) relating to the Company's purchase of -8 and Boeing 737-7 ("-7", and, together with -8, the "MAX aircraft").
−Removed: Pursuant to the Supplements, the Company amended its order book delivery schedule to better allocate aircraft deliveries to the Company’s network and capacity plans.
+Added: As of December 31, 2025, the Company had 300 Boeing 737-8 (“-8”) aircraft in its fleet.
+Added: In the second and fourth quarters of 2025, the Company entered into supplemental agreements (the “Supplements”) to its purchase agreement with The Boeing Company (“Boeing”) relating to the Company's purchase of -8 and Boeing 737-7 ("-7", and, together with -8, the "MAX aircraft").
+Added: Pursuant to the Supplements, the Company amended its order book delivery schedule to better allocate aircraft deliveries to the Company’s network and capacity plans, in part due to ongoing aircraft delivery delays.
+Added: The Supplements also include certain confidential credits and other concessions provided to the Company by Boeing.
The Company held 152 remaining MAX options as of December 31, 2025, in addition to 465 firm orders of MAX aircraft to be delivered through 2031.
−Removed: The Company retains significant flexibility to manage its fleet size, including opportunities to accelerate fleet modernization efforts (e.g., through accelerated retirements of the Company's -700 aircraft) if growth opportunities do not materialize.
−Removed: The Company previously announced plans to pursue opportunities to take advantage of current market conditions through the sale and/or sale-leaseback of certain aircraft, with the intention of replacing most, if not all, of such aircraft with new -8 and -7 aircraft from Boeing, at the favorable pricing available in the Company’s order book with Boeing, by the end of 2031, assuming that Boeing is able to meet aircraft delivery expectations.
−Removed: During December 2024, the Company received gross proceeds of $871 million from the sale-leaseback of 35 aircraft (see Note 7 to the Consolidated Financial Statements for more details on the sale-leaseback transactions), which the Company expects to use in support of its capital allocation strategy, which includes funding future fleet modernization and providing Shareholder returns.
−Removed: As a result of these efforts, the Company expects its net fleet capital expenditures during the near term to moderate significantly from recent levels, with the added benefit of further accelerating the modernization of the Company’s fleet.
+Added: The Company retains significant flexibility to manage its fleet size, including opportunities to accelerate fleet modernization efforts (e.g., through accelerated retirements of the Company's Boeing 737-700 (“-700”) aircraft) if growth opportunities do not materialize.
+Added: The Company plans to continue to pursue opportunities to take advantage of favorable market conditions through the sale of certain aircraft, with the intention of replacing most, if not all, of such aircraft with new aircraft.
+Added: The Company expects to use the proceeds of its fleet transactions to support its capital allocation strategy.
For further information regarding the Company’s aircraft contractual order book see “Properties” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The delivery schedule for the -7 is dependent on the Federal Aviation Administration (“FAA”) issuing required certifications and approvals to Boeing and the Company.
The FAA will ultimately determine the timing of the -7 certification and entry into service, and the Company therefore offers no assurances that current estimations and timelines are correct.
−Removed: The Company continues to undertake a number of other fuel conservation initiatives, which are discussed in detail under “Environmental Sustainability.”
+Added: The Company's focus on controlling costs also includes a continued commitment to pursuing, implementing, and enhancing initiatives to reduce fuel consumption and improve fuel efficiency (ASMs per fuel gallon consumed).
+Added: The Company focuses on minimizing fuel consumption and improving fuel efficiency through fleet modernization and other fuel initiatives.
+Added: The Company’s fuel efficiency was aided in 2025, as compared with 2024, by the addition of 55 -8 aircraft to its fleet and by the retirement of 48 of its oldest, least fuel-efficient -700 aircraft and the retirement of seven Boeing 737-800 ("-800") aircraft.
The table below sets forth the Company's ASMs produced per fuel gallon consumed (fuel-efficiency) over the last five years:
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Available seat miles per fuel gallon consumed 83.0 80.8 79.5 77.3 79.2
−Removed: The Company has also entered into fuel derivative contracts to manage its risk associated with significant increases in fuel prices.
−Removed: Based on the current geopolitical and market dynamics, higher premium costs over time, and aggressive cost reductions underway, the Company does not intend to add new hedging positions to its current hedge book.
−Removed: The Company's fuel hedging activities, as well as the risks associated with high and/or volatile fuel prices, are discussed in more detail below under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 10 to the Consolidated Financial Statements.
Salaries, wages, and benefits expense constituted approximately 46.9 percent of the Company's operating expenses in 2025 and was the Company's largest operating cost category.
−Removed: The Company's ability to control labor costs is largely limited by the terms of its collective-bargaining agreements, and increased labor costs from recently ratified contracts and rate inflation have negatively impacted both the Company's low-cost structure and the overall airline industry’s costs.
−Removed: During 2024, active full-time equivalent headcount decreased 2,356, or 3.1 percent, compared with year-end 2023, in an effort to right-size staffing to current operations.
−Removed: The Company expects to continue these efforts in 2025 by minimizing hiring and improving corporate efficiency.
+Added: Increased labor costs from ratified contracts and rate inflation have negatively impacted not only the Company's cost structure but also the broader airline industry’s costs.
+Added: During 2025, active full-time equivalent headcount increased by 340, or 0.5 percent, compared with year-end 2024.
+Added: The Company implemented a reduction in its workforce in February 2025 designed to reduce operating costs, increase efficiency, and create a leaner and more agile organization as part of its transformational plan.
+Added: The reduction in workforce provided for the reduction of approximately 1,750 Employee roles, or 15 percent of corporate positions.
+Added: For 2026, the Company plans to keep corporate headcount expense flat to 2025 levels and will focus on operational efficiencies within frontline teams.
The Company's labor costs, and risks associated therewith, are discussed in more detail below under “Business—Employees,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Fare Structure
−Removed: Southwest offers a relatively simple fare structure that features competitive fares and product benefits, including unrestricted fares, as well as lower fares available on a restricted basis.
−Removed: Southwest fare products include four major categories:
−Removed: “Wanna Get Away®,” “Wanna Get Away Plus®,” “Anytime,” and “Business Select®,” to provide Customers options when choosing a fare.
−Removed: All fare products include the privilege of two free checked bags (weight and size limits apply).
−Removed: Southwest does not charge fees for cancellations or changes to flight reservations, although fare differences may apply.
−Removed: • “Wanna Get Away” fares are generally the lowest fares and are often subject to advance purchase requirements.
−Removed: They are non-refundable, but, subject to Southwest’s No-Show Policy, flight credit for the fare paid for unused travel by the Customer (“flight credit”) may be applied towards future travel on Southwest.
−Removed: Subject to Southwest’s No-Show Policy, Wanna Get Away fares also enable a same-day standby listing, free of airline charges, if there is another flight that departs on the same day as the original flight and is between the same origin and destination airports, but the Customer is required to pay any additional government taxes and fees associated with voluntary changes in their itinerary.
−Removed: Under Southwest's Rapid Rewards® loyalty program, Wanna Get Away fares earn six Rapid Rewards points for each dollar spent on the base fare.
+Added: Southwest's fare structure features competitive fares and product benefits, including fares with different levels of restrictions.
+Added: In 2025, Southwest introduced a new, “Basic” fare on its lowest priced tickets, replacing Southwest’s “Wanna Get Away ® ” offering.
+Added: Southwest also introduced new fare products including “Choice,” “Choice Preferred,” and “Choice Extra,” replacing Southwest’s previous “Wanna Get Away Plus ® ,” “Anytime,” and “Business Select ® ” offerings.
+Added: For travel on or before January 26, 2026, fare bundles included open seating.
+Added: For travel on or after January 27, 2026, fare bundles include assigned seating.
+Added: Southwest’s four major fare product categories provide Customers options when choosing a fare.
+Added: For flights booked and ticketed or changed on or after May 28, 2025, Southwest introduced bag fees for most fare products.
+Added: However, the Company continues to offer two free checked bags to Rapid Rewards ® A-List Preferred Members and Customers traveling on Choice Extra fares and offers one free checked bag to A-List Members and co-brand Cardmembers under its credit card program (weight and size limitations apply).
+Added: Southwest does not charge fees for cancellations or changes to flight reservations for Choice, Choice Preferred, or Choice Extra fares, although fare differences may apply.
+Added: For the Basic fare bundle, Southwest does not charge fees for cancellations, and any changes to flight reservations require an upgrade to the Choice fare.
+Added: • “Basic” fares are generally the lowest fares and are often subject to advance purchase requirements.
+Added: They are non-refundable and non-changeable except as allowed by Southwest’s 24-hour cancellation policy or a fare upgrade to Choice, Choice Preferred, or Choice Extra.
+Added: If a Customer cancels a Basic fare ticket at least 10 minutes prior to the flight’s original departure time, the Customer may be eligible for a flight credit for the fare paid for unused travel by the Customer (“flight credit”).
+Added: Flight credits originating from a Basic fare purchase will expire six months from ticketing date.
+Added: Customers purchasing a Basic fare are assigned a standard seat at check-in or may purchase a standard, preferred, or extra legroom seat, if available.
+Added: A-List or A-List Preferred Members under the Company’s Rapid Rewards loyalty program who purchase a Basic fare are eligible for a same-day standby listing, free of airline charges, if there is another flight that departs on the same day as the original flight and is between the same origin and destination airports, but the Customer is required to pay any additional government taxes and fees associated with voluntary changes in their itinerary.
+Added: Under Southwest's Rapid Rewards loyalty program, Basic fares earn two Rapid Rewards points for each dollar spent on the base fare.
The Company’s loyalty program is discussed below under “Rapid Rewards Loyalty Program.”
−Removed: • “Wanna Get Away Plus” fares are often subject to advance purchase requirements.
−Removed: They are non-refundable, but, subject to Southwest’s No-Show Policy, flight credit may be applied towards future travel on Southwest.
−Removed: Wanna Get Away Plus fares earn eight Rapid Rewards points for each dollar spent on the base fare.
−Removed: Wanna Get Away Plus fares offer Transferable Flight Credit™ that enables Customers to transfer an eligible unused flight credit to another traveler for future use.
+Added: • “Choice” fares may be subject to advance purchase requirements.
+Added: They are non-refundable, but, subject to Southwest’s No-Show Policy, Customers are eligible for a Transferable Flight Credit™ if they cancel a Choice fare ticket.
+Added: Transferable Flight Credits enable Customers to transfer an eligible unused flight credit to another traveler for future travel on Southwest.
Both travelers must be Rapid Rewards Members and only one transfer is permitted.
+Added: Transferable Flight Credits issued for Choice fare tickets purchased on or after May 28, 2025, will expire one year from the date of booking and ticketing.
For bookings through a Southwest Business (corporate travel) channel, a transfer may only be made to an employee of the same organization.
−Removed: Subject to Southwest’s No-Show Policy, Wanna Get Away Plus fares also enable a same-day confirmed change, free of airline charges,
−Removed: if there is an open seat on another flight that departs on the same day as the original flight and is between the same origin and destination airports, but the Customer is required to pay any additional government taxes and fees associated with voluntary changes in their itinerary.
+Added: Choice fares earn six Rapid Rewards points for each dollar spent on the base fare.
+Added: Customers purchasing a Choice fare receive the choice of any standard seat at booking or may purchase a preferred or extra legroom seat, if available.
+Added: Choice fares also enable a same-day confirmed change, free of airline charges, if there is an open seat on another flight that departs on the same day as the original flight and is between the same origin and destination airports, but the Customer is required to pay any additional government taxes and fees associated with voluntary changes in their itinerary (refunds may be provided).
If there is no open seat on this different flight, a traveler may request to be added to the standby list for that flight.
−Removed: • “Anytime” fares are often subject to advance purchase requirements.
−Removed: They are refundable if canceled, subject to Southwest’s No-Show Policy, or flight credit may be applied towards future travel on Southwest.
−Removed: If this fare is purchased with non-refundable flight credit, then the resulting flight credit will be non-refundable if travel is canceled.
−Removed: Anytime fares earn 10 Rapid Rewards points for each dollar spent on the base fare.
−Removed: Anytime fares also receive EarlyBird Check-In®.
−Removed: See “Ancillary Services” below for further information about EarlyBird Check-In.
−Removed: Additionally, Anytime fares receive Priority Lane and Express Lane access through check-in and security lines where available.
−Removed: Further, Anytime fares receive all of the benefits of Wanna Get Away Plus fares, including Transferable Flight Credit and same-day confirmed changes and standby.
−Removed: • “Business Select” fares are often subject to advance purchase requirements.
−Removed: They are refundable if canceled, subject to Southwest’s No-Show Policy, or flight credit may be applied towards future travel on Southwest.
+Added: • “Choice Preferred” fares may be subject to advance purchase requirements.
+Added: They are refundable if canceled, subject to Southwest’s No-Show Policy, or a Transferable Flight Credit may be applied towards future travel on Southwest.
If this fare is purchased with non-refundable flight credit, then the resulting flight credit will be non-refundable if travel is canceled.
−Removed: Business Select fares also include additional perks such as priority boarding with a boarding position in the first 15 boarding positions within boarding group “A,” 12 Rapid Rewards points per dollar spent on the base fare—the highest loyalty point multiplier of all Southwest fare products, one complimentary premium beverage coupon for the day of travel on flights over 250 miles (Customers must be of legal drinking age to drink alcoholic beverages), and free inflight internet service, where available.
−Removed: Business Select fares also receive all of the benefits of Anytime fares, including Priority Lane and Express Lane access through check-in and security lines where available, Transferable Flight Credit, and same-day confirmed changes and standby.
−Removed: Southwest’s No-Show Policy applies if a Customer does not change or cancel a flight segment at least ten minutes prior to scheduled departure and the Customer does not travel on the scheduled flight.
−Removed: In such event, subject to certain exceptions, all unflown segments associated with the reservation will be canceled, and (i) with respect to a Wanna Get Away and Wanna Get Away Plus fares, the fare paid for unused travel will be forfeited;
−Removed: and (ii) with respect to Anytime and Business Select fares, the fare paid for unused travel will be held as a flight credit for future travel on Southwest.
−Removed: In order to enhance and expand upon its already generous and flexible ticketing policies, the Company announced in July 2022 that flight credits will no longer expire.
−Removed: Flight credits for non-refundable fa res are issued as long as the reservation is cancelled more than ten minutes prior to the scheduled departure.
−Removed: Transferable Flight Credits or refunds for refundable fares are issued regardless of cancellation time.
+Added: Transferable Flight Credits issued for Choice Preferred fare tickets purchased on or after May 28, 2025, will expire one year from the date of booking and ticketing.
+Added: Choice Preferred fares earn 10 Rapid Rewards points for each dollar spent on the base fare.
+Added: Customers purchasing a Choice Preferred fare receive the choice of any standard or preferred seat at booking or may purchase an extra legroom seat, if available.
+Added: Additionally, Choice Preferred fares receive Priority Lane and Express Lane access through check-in and security lines where available.
+Added: Further, Choice Preferred fares receive all of the benefits of Choice fares, including a Transferable Flight Credit and same-day confirmed changes and standby.
+Added: • “Choice Extra” fares may be subject to advance purchase requirements.
+Added: They are refundable if canceled, subject to Southwest’s No-Show Policy, or a Transferable Flight Credit may be applied towards future travel on Southwest.
+Added: If this fare is purchased with non-refundable flight credit, then the resulting Transferable Flight Credit will be non-refundable if travel is canceled.
+Added: Transferable Flight Credits issued for Choice Extra fare tickets purchased on or after May 28, 2025, will expire one year from the date of booking and ticketing.
+Added: Customers purchasing a Choice Extra fare receive the choice of any seat at booking, including a preferred or extra legroom seat, if available.
+Added: Choice Extra fares include additional perks such as two free checked bags, early boarding (in groups 1 and 2), and 14 Rapid Rewards points per dollar spent on the base fare, the highest loyalty point multiplier of all Southwest fare products.
+Added: Choice Extra fares also receive one complimentary premium beverage coupon for the day of travel on flights 251 miles or more (Customers must be of legal drinking age to drink alcoholic beverages) and all of the benefits of Choice Preferred fares, including Priority Lane and Express Lane access through check-in and security lines where available, a Transferable Flight Credit, and same-day confirmed changes and standby.
+Added: Southwest’s No-Show Policy applies if a Customer does not change or cancel a flight segment at least 10 minutes prior to scheduled departure and the Customer does not travel on the scheduled flight.
+Added: In such event, subject to certain exceptions, all unflown segments associated with the reservation will be canceled, and (i) with respect to a Basic or Choice reservation, the fare paid for unused travel and any points used for booking the reservation will be forfeited, along with any taxes and fees associated with a reward travel reservation;
+Added: and (ii) with respect to a Choice Preferred or Choice Extra reservation, the value of the ticket will be refunded in the form of a Transferable Flight Credit and any points used for booking the reservation will be redeposited to the Customer’s Rapid Rewards account, and any taxes and fees associated with a reward travel reservation will be converted into a Transferable Flight Credit for future use.
+Added: Transferable Flight Credits created from reservations booked and ticketed and/or voluntarily changed on or after May 28, 2025 have a specified expiration date.
+Added: All travel must be completed by the expiration date.
Ancillary Services
−Removed: The Company offers ancillary services such as Southwest’s EarlyBird Check-In®, Upgraded Boarding, and transportation of pets and unaccompanied minors, in accordance with Southwest’s respective policies.
−Removed: EarlyBird Check-In provides Customers with automatic check-in and an assigned boarding position before general boarding positions become available, thereby improving Customers’ seat selection options (priority boarding privileges are already a benefit of being an “A-List” or “A-List Preferred” tier member under the Company’s Rapid Rewards loyalty program).
−Removed: EarlyBird Check-In pricing is based on multiple factors, including the length of the flight and the historical popularity of EarlyBird Check-In on the route.
−Removed: When available, Southwest sells Upgraded Boarding at the airport or on Customer mobile devices, which allows a Customer to pay for an open priority boarding position in the first 15 positions in its “A” boarding group.
+Added: The Company offers ancillary services such as Priority Boarding and transportation of pets and unaccompanied minors in accordance with Southwest’s respective policies.
+Added: Priority Boarding allows Customers to upgrade their boarding group ahead of Group 1.
+Added: This upgrade is available for purchase starting 24 hours before departure and can be bought up to 60 minutes prior to departure, if available.
+Added: Priority Boarding is non-refundable, priced per flight, per Customer, and sold by segment for connecting itineraries.
+Added: Priority Boarding replaced Southwest’s legacy ancillary services:
+Added: EarlyBird Check-In ® , which provided Customers with automatic check-in and an assigned boarding position before general boarding positions became available, and Upgraded Boarding, which allowed a Customer to pay for an open priority boarding position in the first 15 positions in its “A” boarding group.
+Added: Early Bird Check-In and Upgraded Boarding were available for flights that departed on or before January 26, 2026.
Southwest’s Pet Policy provides Customers an opportunity to travel with a small cat or dog in the aircraft cabin on domestic flights.
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Rapid Rewards Loyalty Program
−Removed: Southwest’s Rapid Rewards loyalty program enables program members (“Members”) to earn points for every dollar spent on Southwest base fares, also including purchases paid with LUV Vouchers, gift cards, or flight credit, with no portion of the purchase price paid with Rapid Rewards points.
−Removed: The amount of points earned under the program is based on the base fare and fare class purchased, with higher fare products (e.g., Business Select) earning more points than lower fare products (e.g., Wanna Get Away).
+Added: Southwest’s Rapid Rewards loyalty program enables program members (“Members”) to earn points for every dollar spent on Southwest base fares, also generally including purchases paid with LUV Vouchers, gift cards, or flight credits.
+Added: The amount of points earned under the program is based on the base fare and fare class purchased, with higher fare products (e.g., Choice Extra) earning more points than lower fare products (e.g., Basic).
As discussed above under “Fare Structure – General,” each fare class is associated with a points earning multiplier, and points for flights are calculated by multiplying the base fare for the flight by the fare class multiplier.
The amount of points required to be redeemed for a flight is based on the base fare and a multiplier.
+Added: In 2025, the Company better aligned earn rates to fare type and introduced variable redemption rates across higher-demand and lower-demand flights as part of its transformational plan.
Under the program, (i) Members are able to redeem their points for every available seat, every day, on every flight, with no blackout dates;
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For example, Members can earn more points (and achieve tier status such as A-List, A-List Preferred, or a Companion Pass ® faster) by purchasing higher fare tickets.
−Removed: Members also have significant flexibility in redeeming points, such as the opportunity to book in advance to take advantage of a lower fare ticket (including many fare sales) requiring fewer points, or by being able to redeem at the last minute, if seats are still available for sale.
−Removed: Members can also earn points through qualifying purchases with Rapid Rewards Partners (which include, for example, car rental agencies, hotels, and restaurants), as well as by using Southwest’s co-branded Chase® Visa credit cards.
+Added: Members also have significant flexibility in redeeming points, such as the opportunity to take advantage of many fare sales, requiring fewer points, or by redeeming points for close-in bookings, if seats are still available for sale.
+Added: Members can also earn points through qualifying purchases with Rapid Rewards Partners (which include, for example, car rental agencies, hotels, and restaurants), as well as by using Southwest’s co-branded Chase ® Visa credit cards or Southwest Airlines Rapid Rewards Debit Card.
In addition to earning points for revenue flights and qualifying purchases with Rapid Rewards Partners, Members also have the ability to purchase, gift, and transfer points, as well as the ability to donate points to selected charities.
+Added: Members are also able to pay for their flights with a combination of cash and Rapid Rewards points—starting with as few as 1,000 points.
+Added: The cash portion of a cash plus points booking earns Rapid Rewards points, Rapid Rewards Business points, tier qualifying points for A-List or A-List Preferred status, and Companion Pass qualifying points.
Southwest’s Rapid Rewards loyalty program features tier status and Companion Pass programs for the most active Members, including “A-List” and “A-List Preferred” status.
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The Member will maintain A-List or A-List Preferred status for the remainder of the calendar year in which the status is earned and for the entire calendar year immediately following.
−Removed: Both A-List and A-List Preferred Members enjoy benefits such as priority check-in and security lane access, where available, as well as dedicated phone lines, standby priority, and an earnings bonus on eligible revenue flights (25 percent for A-List and 100 percent for A-List Preferred).
−Removed: In addition, A-List Preferred Members enjoy free inflight internet service, where available, and up to two complimentary premium drinks per flight on flights traveling 250 miles or more, added directly to their mobile boarding passes.
−Removed: Members who attain A-List or A-List Preferred status receive priority boarding privileges.
−Removed: When these Customers purchase travel at least 36 hours prior to flight time, they receive the best boarding position available (generally, an “A” boarding pass).
−Removed: If an A-List or A-List Preferred Member’s plans change, subject to Southwest’s No Show Policy, they are entitled to same-day confirmed change, free of airline charges, if there is an open seat on another flight that departs on the same day as the original flight and is between the same origin and destination airports, but the Customer is required to pay any additional government taxes and fees associated with changes in their itinerary.
−Removed: If there is no open seat on this different flight, a traveler may request to be added to the standby list for that flight.
+Added: Both A-List and A-List Preferred Members enjoy benefits such as free Wi-Fi sponsored by T-Mobile, priority check-in and security lane access, where available, dedicated phone lines, standby priority, and
+Added: an earnings bonus on eligible revenue flights (25 percent for A-List and 100 percent for A-List Preferred).
+Added: In addition, A-List Preferred Members enjoy up to two complimentary premium drinks per flight on flights traveling 251 miles or more, added directly to their mobile boarding passes.
+Added: If an A-List or A-List Preferred Member’s plans change, subject to Southwest’s No Show Policy, they are entitled to a same-day standby listing, free of airline charges, if there is another flight that departs on the same day as the original flight and is between the same origin and destination airports, but the Customer is required to pay any additional government taxes and fees associated with voluntary changes in their itinerary.
+Added: A-List Preferred and A-List Members are not eligible for free same-day change unless the Member purchases a qualifying fare.
Another feature of the Rapid Rewards loyalty program is the Companion Pass.
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The Member and designated Companion must travel together on the same flight.
−Removed: In addition, since early 2024, Members are able to pay for their flights with a combination of cash and Rapid Rewards points—starting with as few as 1,000 points.
−Removed: Bookings with flights completed before January 1, 2025, paid for with a combination of points plus other forms of eligible payment did not earn Rapid Rewards points, tier qualifying points for A-List or A-List Preferred status, or Companion Pass qualifying points, but did earn tier qualifying segment credits.
−Removed: However, starting January 1, 2025, the cash portion of a cash plus points booking earns Rapid Rewards points, Rapid Rewards Business points, tier qualifying points for A-List or A-List Preferred status, and Companion Pass qualifying points.
−Removed: During 2021, the Company added Rapid Rewards Business, giving businesses the ability to earn Rapid Rewards points.
+Added: Southwest updated its Tier Benefits in 2025, giving A-List and A-List Preferred Members and Cardmembers more value through assigned seats, extra legroom seating, and Southwest’s baggage policy.
+Added: A-List Preferred Members receive their first and second checked bags for free, and A-List Members and Rapid Rewards Credit Cardmembers receive their first checked bag for free.
+Added: When available, Members who attain A-List Preferred status receive the ability to choose an extra legroom seat, preferred seat, or standard seat at the time of booking when purchasing any fare product for themselves and up to eight additional passengers on the same reservation as the A-List Preferred Member.
+Added: When available, A-List Members receive the ability to choose a preferred seat or standard seat at the time of booking when purchasing any fare product and may also upgrade to an extra legroom seat within 48 hours prior to flight departure for themselves and up to eight additional passengers on the same reservation as the A-List Member.
+Added: Additionally, Cardmembers are eligible to select seats within 48 hours of departure on any fare, and certain Cardmembers are eligible to select seats upon booking any fare.
+Added: The Company also began offering the Southwest Airlines Rapid Rewards Debit Card, a Visa debit card issued by Sunrise Banks N.A., in November 2025.
+Added: Debit cardholders can earn Rapid Rewards points on everyday purchases.
+Added: The Company is exploring potential additional opportunities for Rapid Rewards Members to earn and redeem points.
+Added: The Company also gives businesses the ability to earn Rapid Rewards points through Rapid Rewards Business.
By joining Rapid Rewards Business, companies earn Rapid Rewards points that can be applied toward travel on the company’s behalf, while travelers who are Rapid Rewards Members also earn Rapid Rewards points in their personal accounts.
Rapid Rewards Business accounts generally have the same opportunities and benefits to earn and redeem points as individual Member accounts.
−Removed: Southwest’s Rapid Rewards loyalty program has been designed to drive more revenue by (i) bringing in new Customers, including new Members, as well as new holders of Southwest’s co-branded Chase Visa credit cards;
+Added: Southwest’s Rapid Rewards loyalty program has been designed to drive more revenue by (i) bringing in new Customers, including new Members, as well as new holders of Southwest’s co-branded Chase Visa credit cards and Southwest Airlines Rapid Rewards Debit Card;
(ii) increasing business from existing Customers;
−Removed: and (iii) strengthening the Company’s Rapid Rewards hotel, rental car, credit card, and other partnerships.
−Removed: As part of the Company’s transformation initiatives announced in third quarter 2024, Southwest plans to update its Tier Benefits, giving A-List and A-List Preferred Members even better benefits, and has updated its credit card program to offer cardmembers more value through assigned seats and premium seating.
−Removed: The Company also anticipates eventually providing Rapid Rewards Members more opportunities to earn and redeem points for longer-haul international destinations with the development of its airline partnerships and the evolution of its Getaways by Southwest product.
+Added: and (iii) strengthening the Company’s Rapid Rewards hotel, rental car, credit card, debit card, and other partnerships.
+Added: The table below shows the number of flight awards redeemed for each of the past three years.
Year ended December 31,
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Investments in Customer Experience
−Removed: In 2022, the Company announced a multi-year plan to modernize and transform the Customer Experience.
−Removed: These enhancements, expected to cost over $2 billion over a five-year period, include the Company’s plans to:
−Removed: • bring enhanced WiFi connectivity onboard aircraft;
−Removed: • install latest-technology onboard power ports on MAX aircraft to charge personal devices at every seat;
−Removed: • offer larger overhead bins on new aircraft deliveries with more space and easier access to carryon items;
−Removed: • introduce more entertainment options and a wider variety of refreshments in the cabin;
−Removed: • enable new self-service capabilities to bring elevated ease in doing business with the Company, benefiting Employees and Customers.
−Removed: During 2023, the Company completed the enhanced WiFi connectivity onboard its aircraft in order to improve WiFi speed, reliability, and bandwidth.
−Removed: Its new -8 aircraft deliveries are equipped with latest-generation WiFi hardware, and the Company completed its upgrade of the WiFi hardware on its existing fleet.
−Removed: In late 2023, the Company also began taking delivery of MAX aircraft with the latest-generation of onboard USB-A and USB-C power ports on every seat, with a space-saving system that preserves legroom.
−Removed: The Company is also installing the in-seat power ports onboard its existing MAX fleet.
−Removed: Retrofits for in-seat power have begun and occurred at a pace of approximately 11 aircraft per month in 2024.
−Removed: As of December 31, 2024, the Company had 164 aircraft with in-seat power.
−Removed: Further, the Company's new -8 aircraft will come equipped with larger overhead bin space, which is
−Removed: expected to result in better operational metrics, fewer gate checked bags, and an improved Customer Experience.
−Removed: As of December 31, 2024, the Company had approximately 91 -8 aircraft with larger overhead bins, and plans to retrofit the remainder of its -8 fleet, as well as its -800 fleet, with larger overhead bins, beginning in 2025.
−Removed: Additionally, in 2024, the Company also announced a refreshed cabin design, which includes new and more comfortable RECARO seats.
−Removed: Southwest has also invested in modernizing its airport spaces by installing new lobby signage, which is expected to facilitate self-service, enhance the overall visual appeal of the lobbies, and make Customers’ travel journey easier.
−Removed: Southwest offers inflight entertainment and connectivity service.
−Removed: Southwest’s suite of complimentary offerings includes, where available, movies-on-demand, messaging, live and on-demand television, a flight tracker, and more.
−Removed: The free inflight entertainment offerings include over 125 free movies-on-demand each month and free app messaging via iMessage or WhatsApp.
−Removed: The television product consists of at least 13 live channels and approximately 70 on-demand recorded episodes from popular television series.
−Removed: The inflight entertainment service allows Customers to enjoy gate-to-gate entertainment directly on their personal wireless devices.
−Removed: Customers can also purchase satellite internet service while A-List Preferred Members and Business Select Customers receive complimentary satellite internet service.
−Removed: Activating internet service gives Customers the ability to stream videos, complete work tasks, and browse social media.
−Removed: In third quarter of 2024, the Company announced its “Southwest.
−Removed: Even Better.” transformation plan to evolve and improve its Customer Experience.
−Removed: The plan includes the Company’s intentions to:
−Removed: • introduce assigned seating and premium seating options with extra legroom;
−Removed: • evolve its boarding process;
−Removed: • formalize partnerships with international carriers to expand its network, beginning with a partnership with Icelandair that is expected to launch on February 13, 2025 through Baltimore-Washington International Airport;
−Removed: • launch a new Getaways by Southwest vacation product;
−Removed: • enhance its Rapid Rewards program and benefits.
−Removed: These initiatives stem from continued monitoring of Customer feedback, travel patterns, and preferences.
−Removed: The introduction of assigned seating is intended to address changes in Customer travel frequency and preferences for a seat assignment, particularly as the Company has increased its proportion of longer-haul flights in light of reduced demand for short-haul travel.
−Removed: Research indicates that a vast majority of both existing Southwest Customers and potential Customers prefer an assigned seat.
−Removed: In addition to assigning seats, the Company plans to offer a premium, extended legroom portion of the cabin that research shows many Customers also prefer.
−Removed: The Company also plans to evolve its boarding process with the introduction of assigned seating and premium seating options, maintaining the Company’s unique approach in boarding through position numbers and signage displayed on stanchions within the gate area.
−Removed: The move to assigned and premium seating will be a significant undertaking by the Company.
−Removed: In addition to incorporating new technologies and procedures for a seamless transition, the new cabin layout will require approvals from the FAA along with other regulatory agencies and vendor partners.
−Removed: The Company expects to make assigned seat and extended legroom bookings available in the second half of 2025, with related flights occurring in the first half of 2026.
+Added: In recent years, the Company has sought to modernize and transform the Customer Experience.
+Added: As part of the evolution, Southwest began offering free Wi-Fi for all Rapid Rewards Members through a sponsorship with T-Mobile in October 2025.
+Added: Additionally, Southwest offers a comprehensive inflight entertainment platform that includes more than 115 free movies-on-demand each month, live and on-demand television (where available), a flight tracker, and additional curated content, as well as a variety of premium snacks and coffee.
+Added: The Company has further enhanced Customers’ cabin experience through the introduction of in-seat power, larger overhead bins, and a refreshed cabin design.
+Added: The Company began taking delivery of MAX aircraft with the latest-generation of onboard USB-A and USB-C power ports in 2023 to allow Customers to charge personal devices at every seat and completed installation of in-seat power ports on all previously delivered MAX aircraft as of July 2025.
+Added: Further, the Company had received 146 new -8 aircraft and retrofitted 39 -8 aircraft and 15 -800 aircraft with larger overhead bin space as of December 31, 2025.
+Added: All of the Company's new -8 aircraft deliveries will come equipped with larger overhead bin space, and the Company plans to retrofit the remainder of its -8 and -800 fleets with larger overhead bins by the end of 2026.
+Added: The larger overhead bins provide easier access to carryon items and are expected to result in better operational metrics, fewer gate checked bags, and an improved Customer Experience.
+Added: Additionally, the Company received its first deliveries of aircraft with new, more comfortable RECARO seats in 2025 as part of its cabin design refresh.
+Added: The Company has enabled new self-service capabilities to elevate ease of doing business with Southwest.
+Added: The Company launched its participation in TSA PreCheck ® Touchless ID in 2025 so that Rapid Rewards Members enrolled in TSA PreCheck may opt in on the Southwest app.
+Added: Additionally, Customers can now digitally check and pay for up to three bags prior to arriving at the airport through the Southwest app.
+Added: Beginning January 27, 2026, the Company introduced an assigned seating model to provide Customers enhanced optionality based on Customer feedback, travel patterns, and preferences.
+Added: Customers may now select their seats from standard seat, preferred seat, or extra legroom seat options.
+Added: In connection with its move to assigned seating, the Company also redesigned its boarding model based on seat location, fare bundle, and loyalty program status.
+Added: Generally, Customers flying on a Choice Extra fare or with A-List Preferred Member status board in groups one or two, Choice Preferred fares board groups three through five, Choice fares board groups five through eight, and Basic fares are the last to board.
+Added: A-List Members generally board in groups one through five, and Rapid Rewards Credit Cardmembers booking Basic or Choice fares may generally board in group five or sooner.
+Added: Customers may also purchase Priority Boarding 24 hours prior to departure to be among the first to board.
+Added: Global Airline Partnerships
+Added: In 2025, Southwest launched its first partnerships with international carriers to expand its network and connect Customers with more global destinations with the goal of generating additional demand for travel across the Southwest network.
+Added: The Company now has interline partnerships with Icelandair, China Airlines, EVA Air, Philippine Airlines, Condor, and Turkish Airlines to provide transoceanic connectivity through Baltimore-Washington, Denver, Nashville, Orlando, Pittsburgh, Raleigh-Durham, Honolulu, Los Angeles, Seattle, San Francisco, Ontario, and Chicago.
+Added: The Company is exploring opportunities to add additional gateways with these partners in 2026.
+Added: The Company additionally intends to continue to pursue partnerships with other airlines to further expand the reach of the Company’s network, with a goal to add additional partners during 2026.
+Added: The Company also launched a partnership with Hahnair in 2025 to expand its global ticketing reach to markets outside of the United States and enable international Customers to purchase Southwest itineraries in their local currency.
Getaways by Southwest
−Removed: Beginning in 2025, the Company plans to offer Customers an in-house vacation package product called “Getaways by Southwest”, replacing the outsourced product Southwest has historically offered.
−Removed: This new vacation booking platform is expected to allow the Company to appeal directly to its broad existing Customer base with an enhanced offering that includes both lodging and excursions, which is designed to drive growth with leisure travelers and grow higher-margin revenues.
+Added: In August 2025, the Company launched Getaways, a new in-house vacation package product, replacing the outsourced product Southwest historically offered.
+Added: Southwest has over 25 direct hotel partnerships in over 30 destinations through Getaways and is exploring opportunities to introduce more hotel partnerships in 2026.
+Added: Customers booking a vacation through Getaways can check two bags for free and earn five Rapid Rewards points
+Added: per dollar spent on bookings.
+Added: Customers can also cancel their packages and receive vacation travel credits, valid for 18 months, that can be applied toward a future Getaway, and Customers have the flexibility to make changes to their Getaway package without paying a change fee.
+Added: The Company expects Getaways to appeal directly to its broad existing Customer base with an enhanced offering that includes both lodging and excursions, designed to drive growth with leisure travelers and grow higher-margin revenues.
Distribution and Marketing Approach
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For the years ended December 31, 2025, and December 31, 2024, approximately 78 percent and 81 percent, respectively, of the Company’s Passenger revenues originated from Southwest.com or the Southwest App (including revenues from SWABIZ ® , the Company's online booking tool designed for business Customers who prefer a self-service and low-cost solution for booking their air travel on Southwest).
−Removed: This “direct to Customer” distribution approach has historically provided a cost advantage for the Company because it eliminates fees associated with the use of third-party distribution channels such as third-party online travel platforms.
−Removed: In light of changing travel patterns post-pandemic, in 2024 the Company focused on attracting new and less frequent Customers, in part, through new distribution channels and the launching of new ad campaigns.
−Removed: The Company expanded its distribution channels through partnerships with flight meta search engines, including Google Flights, Kayak, and Skyscanner, to increase visibility and drive traffic for bookings to Southwest.com.
−Removed: In April 2024, the Company launched “The Big Flex”:
−Removed: a bold new brand marketing campaign showcasing the Company’s fun-loving personality and flexible and Customer-friendly policy points of difference on every fare, everywhere.
−Removed: The campaign highlights choice and flexibility for the Company’s Customers delivered with the Hospitality for which the Company is famous.
−Removed: Additionally, in May 2024, the Company launched “Wanna Go Wednesdays” on Southwest.com, a new weekly program that allows Customers to book the latest low fares on routes that are still available for last minute bookings.
−Removed: The Company also invested in technology to support artificial intelligence ("AI")-based marketing efforts and more personalized marketing capabilities throughout 2024.
−Removed: The Company supports its distribution approach by offering a broad suite of digital platforms to support Customers' travel needs, including full featured websites and apps.
−Removed: These digital platforms help Customers book and manage their Southwest air travel and facilitate the purchase of the Company’s ancillary products, including Fare Upgrades, EarlyBird Check-In, Upgraded Boarding, vacation packages, rental car reservations, hotel reservations, and travel activities.
−Removed: In addition, the digital platforms provide self-service tools for trip management and Customer support.
+Added: The year-over-year decrease primarily resulted from an increase in bookings through online travel agencies in 2025.
+Added: The Company has recently focused on attracting new and less frequent Customers, in part, through new distribution channels and the launching of new ad campaigns.
+Added: The Company has expanded its distribution channels through partnerships with flight meta search engines, including Google Flights, Kayak, Skyscanner, and, in 2025, online travel agencies Expedia and Priceline, to increase visibility and drive traffic for bookings to Southwest.com.
+Added: In connection with its international partnerships, the Company also expanded its distribution in 2025 to allow (i) other partner airlines to sell tickets which include Southwest segments and (ii) third party agencies associated with partner airlines to sell tickets for Southwest itineraries in local, foreign currency.
+Added: In June 2025, the Company launched “Are You Sitting Down?”:
+Added: a marketing campaign to build awareness and excitement for the Company’s new assigned seating policy and extra legroom seats options.
+Added: The campaign highlights choice and greater control of the travel experience for the Company’s Customers delivered with the Company’s unique sense of humor.
+Added: Additionally, in August 2025, the Company launched a “Vacation is More Fun When it’s Flexible!” campaign touting its new in-house vacation product, Getaways.
+Added: The Company has also expanded its promotional text message and push notification campaigns, enhanced its Rapid Rewards acquisition programs, and improved co-brand credit card acquisition strategies to strengthen Customer engagement and loyalty.
+Added: The Company continues to invest in technology to support artificial intelligence ("AI")-based marketing efforts.
+Added: In 2025, the Company undertook broad search engine and generative AI engine optimization efforts across its mobile app, landing pages, and destination, origination, and market specific pages.
+Added: Generative AI copy testing has been introduced to refine marketing messages and optimize conversion rates, contributing to increased sales per marketing effort.
Digital Hospitality
−Removed: The Company is committed to its goal of widening its Customer Service advantage by enhancing digital Hospitality.
−Removed: The Company is amid a multi-year digital service modernization program designed to, among other things, provide better Customer Service at a lower cost.
−Removed: Key focus areas of the digital service modernization program include contact center service modernization, airport service modernization, Customer Service communications, and disruptions management.
−Removed: In 2024, the Company implemented digital enhancements to empower Customer self-service and provide more efficient Customer Service.
−Removed: Key updates included a revamped Help Center, an expanded chatbot for improved information access, and enhanced disruption management tools (such as options to rebook or cancel flights and access nearby airports).
−Removed: In compliance with new DOT regulations, Southwest introduced automated ancillary refunds for canceled flights, additional flight rebooking flexibility for applicable schedule adjustments, and improved content to clearly communicate Customer options.
−Removed: The Company added additional Customer Service capabilities, including improved error messaging for increased clarity and actionable options for Customers, improved booking options when booking trips with youth travelers on mobile devices, increased passenger capacity per reservation, self-service features that enable self-management of companion designations, inbound flight tracking, and increased travel flexibility with improved standby booking options for connecting flights.
−Removed: In 2024, the Company introduced generative AI capabilities and automation tools with a goal to improve Customer Service, increase efficiency, and drive lower cost while exceeding Customers’ Hospitality expectations.
−Removed: The Company continues to test the effectiveness of generative AI capabilities across the Customer journey.
−Removed: During 2024, as a result of these efforts, the Company experienced fewer contact center calls per trip, while increasing app utilization on the day of travel, each as compared with 2023.
−Removed: The Company’s digital service modernization program is expected to continue to deliver additional enhancements and efficiencies in 2025.
−Removed: The Company continues to enhance digital revenue-generating capabilities through strategic investments and innovations.
−Removed: The Company deployed a comprehensive suite of optimizations designed to improve product performance across air sales and ancillary offerings, including Upgraded Boarding, EarlyBird Check-In, Cars, Hotels, and Vacations.
−Removed: These efforts are designed to drive incremental revenue while enhancing the Customer Experience.
−Removed: The Company has made significant advancements in marketing automation, particularly on the mobile app.
−Removed: Generative AI-powered copy testing has been introduced to refine marketing messages and optimize conversion rates, yielding increased sales per marketing effort.
−Removed: The Company has also implemented enhanced Rapid Rewards acquisition techniques, promotional text message campaigns, increased push messaging marketing, and improved co-brand acquisition strategies to drive Customer engagement and loyalty.
−Removed: The Company continues to test ongoing improvements to its digital shopping and booking experience to further increase fare upsells and booking conversion effectiveness.
−Removed: Further, the Company has expanded its offerings to include overnight connection flight options, enhanced Rapid Rewards marketing content, and added the ability for Customers to pay for flights using cash plus points.
−Removed: Improvements to account management tools underscore the Company’s commitment to meeting diverse customer needs and growing its market presence.
+Added: The Company remains committed to strengthening its Customer Service by enhancing digital Hospitality capabilities.
+Added: The Company continues to execute a multi-year digital service modernization program designed to, among other things, improve Customer Service while lowering operating costs.
+Added: Key focus areas of the program include contact center service modernization, airport service modernization, Customer Service communications, and disruptions management.
+Added: In 2025, the Company implemented digital enhancements to empower Customer self-service and improve operational efficiency.
+Added: Key updates included digital pre-paid checked baggage fee collection, tools to improve the check-in and boarding processes in conjunction with assigned seating, and the launch of a new security processing capability, TSA Precheck Touchless ID, at multiple airports in partnership with the Transportation Security Administration (“TSA”).
+Added: The Company added additional Customer Service capabilities, including self-service assigned seating management, automated messaging directing eligible Customers to check carryon bags prior to arriving at the jet bridge, and improved account assistance tools aimed at reducing contact center volume and
+Added: increasing account protection through multi-factor authentication.
+Added: The Company also launched a simplified Rapid Rewards enrollment process and introduced free Wi-Fi sponsored by T-Mobile for Rapid Rewards Members.
+Added: The Company advanced several initiatives during 2025 to enhance its digital channels and improve commercial performance.
+Added: Southwest continued modernizing its core digital platforms with the launch of a fully responsive web homepage and an improved mobile app.
+Added: Southwest redesigned its mobile app homepage, upcoming trips view, offers experience, and navigation structure.
+Added: Southwest’s app now provides enhanced mobile boarding passes and information on inflight food, beverage, entertainment, and connectivity options.
+Added: The Company also deployed a newly redesigned Low Fare Calendar experience, making it easier to discover low fares on desktop and mobile experiences, and enabled International Document Scanning for international travelers to validate supported travel documents.
+Added: Improvements to these digital platforms underscore the Company’s commitment to meeting various Customer needs and growing its market presence.
Southwest Business ® Initiatives
−Removed: In addition to improvements in the Company's consumer-direct Southwest.com channel of distribution and new flight search engine partnerships, in recent years the Company has taken significant action, including investments in Employees, processes, and technology, in order to grow its corporate travel business with the goal of making it easier for corporate travel Customers and travel management companies to do business with Southwest.
+Added: In addition to improvements in the Company's consumer-direct Southwest.com channel of distribution and new distribution partnerships, in recent years the Company has taken significant action, including investments in Employees, processes, and technology, in order to grow its corporate travel business with the goal of making it easier for corporate travel Customers and travel management companies to do business with Southwest.
The Company employs a multi-channel distribution strategy for its corporate business travel, offering the ability for business travelers and travel decision makers to book Southwest fares within all major Global Distribution System platforms via Amadeus, Travelport, and Sabre channels, through third-party partners directly connected to the Company's host reservation system, or through the Company’s free corporate online booking tool, SWABIZ ® .
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The Company offers Southwest Business Meetings, a product for its corporate Customers that is designed to make it easier for meeting planners to manage travel on Southwest by streamlining the process to book group travel for meetings and conventions.
−Removed: In late 2024, the Company beta-launched a new group travel tool, Southwest Groups, designed to bring many self-service features to travel managers in early 2025.
+Added: In 2025, the Company launched Southwest Groups, a redefined booking and travel management tool for travel decision makers specializing in group travel.
The Company also offers Southwest Business Assist™, a travel portal that enables corporate travel buyers, travel decision makers, and travel management companies to better manage their business travel on Southwest using dashboards, reports, automated processing of travel benefits, and Customer Service.
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The site also facilitates car and hotel bookings and offers a suite of reports for travel managers.
−Removed: The Company has additionally developed a new data-sharing API channel, Southwest Business TravelTrack®, that provides business travel Customers and third-party partners more visibility into the business they do with Southwest.
+Added: The Company has additionally developed a data-sharing application programming interface channel, Southwest Business TravelTrack ® , that provides business travel Customers and third-party partners more visibility into the business they do with Southwest.
Technology Initiatives
−Removed: The Company is focused on the prioritization and execution of its technology investments through an evolving multi-year plan, with the goal of developing stronger, more adaptable, more efficient, and more reliable technology systems to support the Company's strategic priorities.
+Added: The Company is focused on the prioritization and execution of its technology investments through an evolving multi-year plan, with the goal of developing stronger, more adaptable, more efficient, more secure, and more reliable technology systems to support the Company's strategic priorities.
The Company has committed, and plans to continue to commit, significant resources to technology improvements in support of its ongoing operations and initiatives.
−Removed: During 2024, among other things, the Company (i) replaced its legacy flight planning system;
−Removed: (ii) expanded its distribution channels via multiple search engine partnerships;
−Removed: (iii) improved communication tools for Employees;
−Removed: (iv) delivered better visual and real-time information to assist both Customers and Employees;
−Removed: (v) leveraged AI to expedite support and call resolution time for Customer Service agents;
−Removed: (iv) worked towards moving to a fully digital (i.e., paperless) turn process;
−Removed: and (v) enabled Rapid Rewards Members to pay for their flights with a combination of cash and Rapid Rewards points.
−Removed: During 2023, among other things, the Company invested in technology and tools that are expected to enhance resiliency and improve its recovery during irregular operations, implemented a new revenue management system, introduced Customer bag tracking, enhanced Customer digital self-service capabilities, and launched Southwest Business Meetings.
−Removed: During 2022, the Company added technology for (i) a new fare product launch;
−Removed: (ii) a new human resources and payroll system;
−Removed: (iii) a new business travel management system;
−Removed: and (iv) enhanced cyber controls and monitoring.
−Removed: The Company continues to invest significantly in technology resources including, among others, the Company's systems related to (i) new assigned seating, premium seating, and boarding processes;
−Removed: (ii) industry standard interline and codeshare capabilities;
−Removed: (iii) 24-hour operations;
−Removed: (iv) flight planning and scheduling designed to improve operating efficiency;
−Removed: (v) daily flight schedule management designed to improve fleet utilization at lower incremental costs;
−Removed: (vi) aircraft turn capabilities designed to improve operating efficiency;
−Removed: (vii) crew mobility and scheduling designed to improve operating quality and resiliency;
−Removed: (viii) foundational airline operating systems;
−Removed: (ix) ancillary products, including vacation packages such as the announced Getaways by Southwest platform;
−Removed: (x) financial planning;
−Removed: (xi) Customer Service Agent mobility;
−Removed: (xii) technology infrastructure and cybersecurity;
−Removed: and (xiii) digital Customer Service modernization.
−Removed: The move to assigned and premium seating, airline partnerships, and 24-hour operations represent significant undertakings by the Company and will require the incorporation of new technologies and procedures for a seamless transition.
+Added: During 2025, among other things, the Company (i) developed new technology to enable assigned seating, extra legroom seating, and enhanced boarding processes;
+Added: (ii) introduced free Wi-Fi sponsored by T-Mobile for all Rapid Rewards Members;
+Added: (iii) further expanded its distribution channels via partnerships with Expedia and
+Added: (iv) launched a digital pre-paid bags application;
+Added: (v) enhanced and modernized chat functions and AI-based support for service replies;
+Added: (vi) enabled interline partnerships;
+Added: (vii) replaced its legacy flow management system in support of the Company’s continued investment in operational excellence;
+Added: and (viii) modernized operational systems that enabled redeye flying.
+Added: The Company continues to invest significantly in technology resources including, among others, the Company's systems related to (i) inflight Wi-Fi capabilities;
+Added: (ii) digital Customer Service modernization;
+Added: (iii) enhancing the Customer Experience and premium product offerings;
+Added: (iv) industry standard interline and codeshare capabilities;
+Added: (v) further scaling 24-hour operations;
+Added: (vi) flight schedule management designed to improve operating efficiency and fleet utilization;
+Added: (vii) aircraft turn capabilities designed to improve operating efficiency;
+Added: (vii) crew mobility and scheduling capabilities designed to improve operating quality and resiliency;
+Added: (viii) further enhancing the Company’s vacation packages with Getaways;
+Added: (ix) modernization of the Company’s financial management systems;
+Added: (x) modernization of the Company's data and processing AI capabilities;
+Added: and (xi) further modernization of technology infrastructure and cybersecurity.
+Added: The Company’s strategic initiatives represent significant undertakings by the Company and continue to require the incorporation of new technologies and procedures for a seamless transition.
Environmental Sustainability
−Removed: The Company remains steadfast in its desire to pursue, implement, and enhance initiatives to address the Company's impact on the environment.
−Removed: Over the years, the Company has undertaken a number of initiatives that have a direct impact on its fuel conservation and emissions-related reduction efforts, such as the following:
−Removed: • introduction of the MAX aircraft into the Company's fleet, which is more fuel-efficient and releases fewer CO₂ emissions per ASM than the Company's previous generation of 737 aircraft;
−Removed: • installation of winglets, which reduce drag and increase fuel efficiency, on all aircraft in the Company's fleet;
−Removed: • application of periodic engine washes, which helps improve fuel efficiency;
−Removed: • implementation of procedures for the use of electric ground power and pre-conditioned air for aircraft at the gate, when available;
−Removed: • replacement of eligible internal combustion ground support equipment with electric equipment at select locations;
−Removed: • deployment of auto-throttle and vertical navigation to maintain optimum cruising speeds;
−Removed: • implementation of engine start procedures to support the Company's single engine taxi procedures;
−Removed: • implementation of procedures on the timing of auxiliary power unit starts on originating flights to reduce auxiliary power unit usage;
−Removed: • implementation of fuel planning initiatives to safely reduce loading of excess fuel;
−Removed: • implementation of procedures to reduce aircraft engine idle speed while on the ground, which also increases engine life;
−Removed: • utilization of Company-optimized routes (including flying the best wind routes to take advantage of tailwinds or to minimize headwinds);
−Removed: • improvements in flight planning algorithms to better match the Company's aircraft flight management system and thereby enabling the Company to fly at the most efficient altitudes;
−Removed: • substitution of Pilot and Flight Attendant flight bags and paper manuals with lighter Electronic Flight Bag tablets;
−Removed: • implementation of Real Time Descent Winds (automatic uplinking of up-to-date wind data to the aircraft, allowing crews to time the descent to minimize thrust inputs and, as a result, improve fuel efficiency per flight).
−Removed: The Company participates in Required Navigation Performance (“RNP”) operations as part of the FAA's Performance Based Navigation program, a key component of the Next Generation Transportation System (“NextGen”), which is intended to modernize the U.S.
−Removed: air traffic system by addressing limitations on air transportation capacity and making more efficient use of airspace.
−Removed: RNP combines the capabilities of advanced aircraft avionics, satellite navigation (instead of less precise ground-based navigation), and new flight procedures to enhance navigational and operational capabilities, improve fuel efficiency, and minimize greenhouse gas (“GHG”) emissions.
+Added: Over the years, the Company has undertaken a number of initiatives that have a direct impact on its fuel conservation and emissions-related reduction efforts, including the introduction of the MAX aircraft into the Company's fleet, which is more fuel-efficient and releases fewer CO₂ emissions per ASM than the Company's previous generation of 737 aircraft.
+Added: The Company participates in Required Navigation Performance (“RNP”) operations as part of the FAA's Performance Based Navigation program.
+Added: RNP combines the capabilities of advanced aircraft avionics, satellite navigation (instead of less efficient ground-based navigation), and new flight procedures to enhance navigational and operational capabilities, improve fuel efficiency, and minimize greenhouse gas (“GHG”) emissions.
RNP approaches, which are published by the FAA, are currently available at a limited number of the airports Southwest serves, but the Company continues to work with the FAA to develop and seek more use of RNP approaches and to evolve air traffic control rules to support greater utilization of RNP.
−Removed: In 2021, the Company announced near- and long-term environmental sustainability goals, in addition to a series of actions and initiatives designed to assist the Company in achieving these goals.
−Removed: The Company refreshed its environmental sustainability plan in early 2023 and continually monitors developments related to climate change and evaluates its goals and progress against these developments.
−Removed: The Company expects its path toward achievement of these goals will depend on, among other things, (i) increased use of sustainable aviation fuel (“SAF”), which is not presently available at scale or at prices competitive to jet fuel;
−Removed: (ii) improved fuel efficiency from fleet renewal or planned fuel efficiency initiatives;
−Removed: (iii) operational initiatives;
−Removed: and (iv) technological innovation.
−Removed: As part of its corporate sustainability efforts, the Company has published the Southwest One Report describing the Company's environmental sustainability goals, actions, initiatives, and strategies, which include the foregoing and other efforts to address GHG emissions and other environmental matters such as energy and water conservation, waste minimization, and recycling.
−Removed: Information contained in the Southwest One Report is not incorporated by reference into, and does not constitute a part of, this Form 10-K.
−Removed: While the Company believes that the disclosures contained in the Southwest One Report and other voluntary disclosures regarding environmental, social, and governance (“ESG”) matters are responsive to various areas of investor interest, the Company believes that certain of these disclosures do not currently address matters that are material to the Company’s operations, strategy, financial condition, or financial results, although this view may change in the future based on new information that could materially alter the estimates, assumptions, or timelines used to create these disclosures.
−Removed: Given the estimates, assumptions and timelines used to create the Southwest One Report and other voluntary disclosures, the materiality of these disclosures is inherently difficult to assess in advance.
−Removed: The airline industry is heavily regulated, especially by the federal government, and there are a significant number of governmental agencies and legislative bodies that have the ability to directly or indirectly affect the Company and/or the airline industry financially and/or operationally.
−Removed: Regulations affecting the Company and/or the airline industry that have been or may be imposed by several of these governmental agencies and legislative bodies include, but are not limited to, those discussed below.
−Removed: In May 2024, Congress enacted the FAA Reauthorization Act of 2024 (the “2024 Reauthorization Act”).
−Removed: This statute authorizes funding for the FAA through federal fiscal year 2028 and provides direction to various FAA and DOT offices and programs over the next several years.
−Removed: The 2024 Reauthorization Act resulted in changes in federal law that will impact commercial air carriers.
−Removed: For example, the 2024 Reauthorization Act mandates that the DOT or the FAA promulgate numerous new rulemakings (or standards setting actions), including:
−Removed: (i) rulemakings regarding
−Removed: passenger accessibility, including training, aircraft accessibility, airport announcements and communications, and online portal accessibility, and (ii) mandates for the FAA, including for flight data recovery from overwater operations, modernization and improvements to aircraft evacuations, minimum qualifications for overseas mechanics working on U.S.
−Removed: registered aircraft, crewmember self-defense training, cybersecurity, and cabin air safety.
−Removed: Some notable rulemakings and a summary of other major initiatives being pursued by the DOT and the FAA related to the airline industry are described below.
−Removed: With the change of presidential administrations in January 2025, it is unclear which of these initiatives will be fully implemented, and whether the DOT, the FAA, and other agencies will pursue new initiatives for regulating airlines.
+Added: The Company has previously announced certain near- and long-term environmental sustainability goals and has undertaken related initiatives.
+Added: These goals and initiatives remain subject to ongoing evaluation and may change as market, regulatory, or technological conditions evolve.
+Added: In addition, the Company’s ability to make progress towards its sustainability goals and the advancement of related initiatives will depend on factors outside of its control, including, among other things, the future availability and cost of sustainable aviation fuel ("SAF"), advancements in fuel‑efficient technology, government support, and other operational or technological innovations.
+Added: While the Company believes that its voluntary disclosures regarding environmental, social, and governance matters are responsive to various areas of investor interest, the Company believes that certain of these disclosures do not currently address matters that are material to the Company’s operations, strategy, financial condition, or financial results, although this view may change in the future based on new information that could materially alter the estimates, assumptions, or timelines used to create these disclosures.
+Added: Given the estimates, assumptions, and timelines used to create such disclosures, the materiality of these disclosures is inherently difficult to assess in advance.
+Added: The airline industry is heavily regulated domestically and internationally, especially by the federal government, and there are a significant number of governmental agencies, offices, and legislative bodies that could directly or indirectly affect the Company and the airline industry financially and operationally.
+Added: Regulations affecting the Company or the airline industry include, but are not limited to, those discussed below.
+Added: For further discussion of the
+Added: risks relating to regulation of the Company and the airline industry, see “Risk Factors—Legal, Regulatory, Compliance, and Reputational Risks.”
+Added: Commercial air carriers in the United States are subject to regulation by the Department of Transportation ("DOT"), which regulates economic operating authority for air carriers and consumer protection for airline passengers, and the FAA, an agency within the DOT which has the authority to regulate safety aspects of civil aviation operations.
+Added: The FAA manages the nation's labor-intensive air traffic control (“ATC”) system.
+Added: The Company may be subject to civil penalties or cease and desist orders for violations of federal regulations.
+Added: The airline industry is dependent on the federal government in terms of its effective management of aviation security and customs functions.
+Added: The TSA regulates aviation security and operates airport checkpoints and baggage screening systems, while U.S.
+Added: Customs and Border Protection (“CBP”) is responsible for border protection and facilitates the flow of international travel by regulating immigration and customs laws.
+Added: Other federal entities with influence over airlines include, but are not limited to, the U.S.
+Added: Department of Justice, which oversees certain airline antitrust matters;
+Added: the National Mediation Board, which administers the Railway Labor Act governing labor relations in the airline industry;
+Added: and the Pipeline and Hazardous Materials Safety Administration, which establishes rules for hazardous materials and other dangerous goods transported on aircraft.
+Added: The Company is also subject to various state, local, and foreign laws and regulations.
+Added: The airline industry may also be impacted by the activities of Congress.
+Added: For instance, from time-to-time, Congress may be unable to enact appropriations bills to fund one or more of the aforementioned agencies, which may result in a lapse in appropriations and cause a partial government shutdown.
+Added: Government shutdowns may disrupt important government services, such as ATC functions.
+Added: A shutdown lasting more than several days, such as the partial government shutdown that occurred from October 1, 2025 through November 12, 2025, has resulted, and may in the future result, in substantial operational and financial burdens on the Company.
Economic and Consumer Protection Regulation
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Department of Transportation
−Removed: The DOT regulates economic operating authority for air carriers and consumer protection for airline passengers.
−Removed: The DOT may take legal enforcement action against air carriers for violating the DOT’s statutes or regulations by imposing civil penalties up to $75,000 per occurrence.
−Removed: In January 2023, the DOT issued a notice stating that, going forward, it intends to seek higher civil penalties, and the DOT’s recent enforcement actions have reflected significant increases in the level of civil penalties assessed for violations.
−Removed: To provide passenger transportation in the United States, a domestic airline is required to hold a Certificate of Public Convenience and Necessity from the DOT.
−Removed: A Certificate of Public Convenience and Necessity is unlimited in duration, and the Company’s certificate generally permits it to operate among any points within the United States and its territories and possessions.
+Added: To provide passenger transportation in the United States, a domestic airline is required to hold a Certificate of Public Convenience and Necessity from the DOT, which is unlimited in duration.
+Added: The Company’s certificate generally permits it to operate among any points within the United States and its territories and possessions.
Additional DOT authority, in the form of a certificate or exemption from certificate requirements, is required for a U.S.
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The DOT's consumer protection and enforcement authority is derived primarily from a federal statutory prohibition on “unfair or deceptive practices or unfair methods of competition” by air carriers.
−Removed: In January 2021, the DOT codified the definitions for the terms “unfair” and “deceptive” by adopting the definitions used by the Federal Trade Commission and amended and clarified the procedures the DOT will follow when engaging in aviation consumer protection rulemaking and enforcement.
−Removed: The purpose of this rule is to help establish clear and consistent criteria for unfair or deceptive practices while aligning the DOT’s oversight of aviation entities with other government agencies’ oversight of other sectors of the economy regarding unfair or deceptive practices.
−Removed: Under the above-described authority, the DOT has adopted so-called “Passenger Protection Rules,” which address a wide variety of matters, including flight delays on the tarmac, chronically delayed flights, denied boarding compensation, baggage liability requirements, ticket refunds, and advertising of airfares, among others.
−Removed: For example, under the DOT's tarmac delay rule and subject to limited exceptions, air carriers must not allow an aircraft to remain on the tarmac for more than 3 hours (for domestic delays) or more than 4 hours (for international delays), without allowing passengers to deplane, subject to limited exceptions.
−Removed: In addition, the Passenger Protection Rules require airlines to (i) display ontime performance on their websites;
−Removed: (ii) adopt Customer Service plans, publish those plans on their website, and audit their own compliance with their plans;
−Removed: (iii) designate an employee to monitor the performance of airlines' flights;
−Removed: (iv) provide information to passengers on how to file complaints;
−Removed: (v) respond in a timely and substantive fashion to consumer complaints;
−Removed: (vi) pay compensation to each passenger denied boarding involuntarily from an oversold flight;
−Removed: and (vii) prominently disclose all potential fees for optional ancillary services on their websites.
−Removed: The Passenger Protection Rules also require that (i) advertised fares include all government-mandated taxes and fees;
−Removed: (ii) passengers be allowed to either hold a reservation for up to 24 hours without making a payment or cancel a
−Removed: paid reservation without penalty for 24 hours after the reservation is made, as long as the reservation is made at least seven days in advance of travel;
−Removed: (iii) fares may not increase after purchase;
−Removed: (iv) baggage fees must be disclosed to the passenger at the time of booking;
−Removed: (v) the same baggage allowances and fees must apply throughout a passenger’s trip;
−Removed: (vi) baggage fees must be disclosed on e-ticket confirmations;
−Removed: and (vii) passengers must be promptly notified in the event of delays of more than 30 minutes or if there is a cancellation or diversion of their flight.
−Removed: In 2024, the DOT was active in airline consumer protection, proposing or finalizing several new rules.
−Removed: For example, the DOT finalized a new rule addressing airline ticket refunds which is in effect and being implemented by the Company and other airlines.
−Removed: The rule requires airlines to provide a full ticket refund, which may include ancillary fees in addition to the base fare, if a passenger chooses not to accept a rebooking following a cancellation or significant delay.
−Removed: The DOT also finalized a new rule designed to enhance protections for passengers who use wheelchairs and assistive devices.
−Removed: The DOT has also issued a new final rule related to when and how air carriers must disclose ancillary service fees.
−Removed: The final rule was scheduled to take effect on July 1, 2024.
−Removed: However, in May 2024, various airlines and airline associations challenged the rule in federal court, and the U.S.
−Removed: Court of Appeals for the Fifth Circuit stayed the final rule.
−Removed: Additionally, in August 2024, the DOT issued a proposed rule on family seating that would require U.S.
−Removed: and foreign air carriers to seat children aged 13 and under adjacent to at least one accompanying adult at no additional cost beyond the fare, subject to limited exceptions.
−Removed: This rule is pending, but as of January 28, 2025, is subject to the Executive Order “Regulatory Freeze Pending Review.”
−Removed: In December 2024, the DOT issued a preliminary proposed rule on airline passenger rights.
−Removed: The DOT was soliciting comments on whether, in the event of a significant flight disruption due to causes within an airline’s control, airlines should be required to provide passengers with a graduated level of cash compensation, free rebooking, and amenities such as meals, lodging for overnight delays, and transportation to and from lodging.
−Removed: As of January 28, 2025, this proposed rule is subject to the Executive Order “Regulatory Freeze Pending Review.”
−Removed: The DOT additionally has statutory authority to prohibit discrimination by airlines against consumers on the basis of (i) disability and (ii) race, color, religion, national origin, sex, or ancestry.
−Removed: In August 2023, the DOT finalized its rule on accessible lavatories.
−Removed: The rule requires airlines to have one accessible (i.e., larger) lavatory on new narrow-body aircraft going forward.
−Removed: Specifically, air carriers must comply with these measures with respect to new aircraft that an air carrier operates that are (i) originally ordered after October 3, 2033, (ii) delivered after October 2, 2035, or (iii) part of a new type-certificated design filed with the FAA or a foreign carrier’s safety authority after October 2, 2024.
−Removed: The new rule does not require a retrofit of existing aircraft.
−Removed: The Company anticipates that this rule could impose substantial costs on the Company and have a material effect on the Company's capital expenditures, earnings, and competitive position.
+Added: The DOT also enforces the requirement that air carriers provide safe and adequate air transportation, and the prohibition on discrimination against consumers on the basis of (i) disability and (ii) race, color, religion, national origin, sex, or ancestry.
+Added: The DOT has adopted “Passenger Protection Rules,” which address a wide variety of matters, including flight delays on the tarmac, chronically delayed flights, denied boarding compensation, baggage liability requirements, ticket refunds, disabled passenger transportation, and advertising of airfares, among others.
+Added: The Passenger Protection Rules affect the Company’s operations and may have a material effect on the Company’s capital expenditures and earnings.
+Added: The DOT’s August 2023 rule on accessible lavatories requires airlines to have one accessible (i.e., larger) lavatory on new narrow-body aircraft that are (i) originally ordered after October 3, 2033, (ii) delivered after October 2, 2035, or (iii) part of a new type-certificated design filed with the FAA or a foreign carrier’s safety authority after October 2, 2024.
+Added: The Company anticipates that this rule could impose substantial
+Added: costs on the Company and have a material effect on the Company's capital expenditures, earnings, and competitive position.
+Added: In 2024, the DOT finalized new rules enhancing protections for passengers who use wheelchairs and assistive devices and requiring airlines to provide a full ticket refund to passengers in certain situations involving a cancellation or significant delay.
+Added: The DOT has also issued a rule related to when and how air carriers must disclose ancillary service fees, although that rule is currently stayed, pending litigation.
+Added: The DOT may expand upon its rules or issue new rules in the future, which could increase the cost of regulatory compliance.
Aviation Taxes and Fees
−Removed: The statutory authority for the federal government to collect most types of aviation taxes, which are used, in part, to finance programs administered by the FAA, must be periodically reauthorized by the U.S.
−Removed: The 2024 Reauthorization Act extended, but did not modify, most commercial aviation taxes through September 30, 2028.
−Removed: This includes the two principal FAA-related taxes paid by airline consumers when purchasing an airline ticket:
−Removed: (i) the 7.5% excise tax (applied to the base fare of an airline ticket as well as any mandatory passenger fees charged by the airline) and (ii) the domestic segment tax ($5.00 per passenger segment), capped at two segments each way.
−Removed: The domestic segment tax is adjusted annually for inflation by the Internal Revenue Service.
−Removed: Air carriers also directly pay the commercial jet fuel tax (4.3 cents per gallon).
−Removed: In addition to FAA-related taxes, there are federal taxes related to the U.S.
+Added: The federal government requires airlines to collect certain aviation taxes, including an excise tax and a domestic segment tax paid by airline customers, which are used, in part, to finance programs administered by the FAA.
+Added: Airline passengers are also required to pay a “Passenger Facility Charge” if utilizing a commercial airport with such a user fee, and air carriers pay the federal government a commercial jet fuel tax.
+Added: Additionally, passengers are subject to federal fees related to the U.S.
Department of Homeland Security.
−Removed: These taxes do not need to be reauthorized periodically.
−Removed: Congress has set the Transportation Security Fee paid by passengers at $5.60 per one-way passenger trip originating in the United States.
−Removed: Additionally, international passengers arriving in the United States are subject to U.S.
−Removed: immigration and customs fees that are indexed to
−Removed: These fees are used to support the operations of U.S.
−Removed: Customs and Border Protection (“CBP”).
−Removed: Finally, the U.S.
−Removed: Department of Agriculture's Animal and Plant Health Inspection Service imposes an agriculture inspection fee on international passengers arriving in the United States.
−Removed: Airline passengers are also required to pay a Passenger Facility Charge (“PFC”), a user fee that is authorized via federal statute but assessed by each airport.
−Removed: The maximum PFC is $4.50 per passenger enplanement.
−Removed: New or higher aviation taxes or user fees on air carriers and/or their customers may be imposed by Congress at any time, including during Congress’s anticipated consideration of comprehensive budget and tax legislation in 2025.
+Added: Passengers taking trips originating in the United States pay a Transportation Security Fee.
+Added: International passengers arriving in the United States are subject to U.S.
+Added: immigration and customs fees which support the CBP and an agriculture inspection fee imposed by the U.S.
+Added: Department of Agriculture's Animal and Plant Health Inspection Service.
+Added: Certain of these taxes and fees may be indexed to inflation, and new or higher aviation taxes or user fees on air carriers and/or their customers may be imposed by Congress or the applicable agency at any time.
Operational and Safety Regulation
−Removed: The FAA, an agency within the DOT, has the authority to regulate safety aspects of civil aviation operations.
−Removed: Specifically, the Company and certain of its third-party service providers are subject to the jurisdiction of the FAA with respect to aircraft maintenance and operations, including equipment, ground facilities, dispatch, communications, training, and other matters affecting air safety.
+Added: The Company and certain of its third-party service providers are subject to the jurisdiction of the FAA with respect to aircraft maintenance and operations, including equipment, ground facilities, dispatch, communications, training, and other matters affecting air safety.
+Added: For example, the FAA has rules with respect to crew flight, duty, and rest times.
The FAA, from time to time, issues orders or directives relating to the maintenance and operation of aircraft that require significant expenditures or operational restrictions.
−Removed: The FAA, acting through its own powers or through the appropriate U.S.
−Removed: Attorney, has the power to bring proceedings for the imposition and collection of civil penalties for violation of the FAA's regulations.
−Removed: The FAA requires airlines to obtain and maintain an Air Carrier Operating Certificate, as well as other certificates, approvals, and authorities.
+Added: The FAA also requires airlines to obtain and maintain an Air Carrier Operating Certificate, as well as other certificates, approvals, and authorities.
These certificates, approvals, and authorities are subject to amendment, suspension, or revocation for cause.
−Removed: As the airlines’ safety regulator, the FAA uses tools, such as temporary flight restrictions, to control aircraft operations within designated areas.
−Removed: The FAA may also issue advisory circulars to provide guidance for compliance with aircraft and pilot certification standards, operational standards, training standards, and other FAA rules.
−Removed: These regulatory tools may create additional costs and/or operational restrictions for the Company.
−Removed: For example, the FAA has expressed concern about the deployment of certain wireless telecommunications systems that may cause interference with certain aircraft avionics, such as radio altimeters.
−Removed: In response, the FAA could impose temporary flight restrictions until the agency believes any safety concerns are resolved.
−Removed: The FAA could also require mitigations from aircraft operators (e.g., aircraft retrofits) to avoid any potential interference.
−Removed: With respect to airline operations, the FAA has rules in effect with respect to crew flight, duty, and rest times.
−Removed: Among other things, the rules (i) require a ten-hour minimum rest period prior to a pilot’s flight duty period;
−Removed: (ii) mandate that a pilot must have an opportunity for eight hours of uninterrupted sleep within the rest period;
−Removed: and (iii) impose pilot “flight time” and "duty time” limitations based upon report times, the number of scheduled flight segments, and other operational factors.
−Removed: The FAA has imposed similar duty and rest time requirements for flight attendants.
−Removed: The FAA also manages the nation’s air traffic control (“ATC”) system, a major focus of the 2024 Reauthorization Act.
−Removed: The congressional appropriations committees, as well as FAA leadership are addressing persistent shortages of fully licensed and trained air traffic controllers.
−Removed: Controller shortages at key FAA-managed ATC facilities have been the cause of air carrier delays and cancellations, especially when controller shortages are combined with severe weather in places like Florida and the New York/New Jersey/Philadelphia corridor.
−Removed: Moreover, the increase in commercial space operations in some areas of the country and the expected introduction of advanced air mobility aircraft, could further degrade the FAA’s ability to provide consistently efficient and reliable ATC services.
+Added: The FAA may issue advisory circulars to provide guidance for compliance with aircraft and pilot certification standards, operational standards, training standards, and other FAA rules.
+Added: The FAA Reauthorization Act of 2024 authorizes funding for the FAA through federal fiscal year 2028 and provides direction to various FAA and DOT offices and programs over the next several years, including mandates for new rulemakings.
+Added: As the airlines’ safety regulator, the FAA may utilize a variety of methods, such as temporary flight restrictions, to address safety concerns and control aircraft operations within designated areas.
+Added: The FAA regulates authorizations to land and take off at certain U.S.
+Added: airports the Company serves, including Reagan National Airport and LaGuardia Airport.
+Added: These “slot” restrictions limit operations and regulate capacity.
+Added: The allocation of slots and additional slot restrictions, exemptions, or waivers, which may be implemented in the future, could affect the Company’s operations and strategic initiatives.
The FAA is also the safety regulator of airplane manufacturers and oversees the aircraft certification process.
−Removed: The certification of the -7 is stalled due in part to the FAA’s heightened oversight of aircraft manufacturers and control over the aircraft certification process.
+Added: The certification of the -7 is stalled due in part to the FAA’s heightened oversight of aircraft manufacturers.
The FAA’s oversight of the Company’s original equipment manufacturers and the rate of production of new planes are outside of the Company’s control.
−Removed: In June 2023, the FAA finalized a new rule requiring that airplane manufacturers install a physical secondary barrier between the aircraft’s flight deck and cabin in order to provide additional protection against unauthorized access to the flight deck.
−Removed: The final rule provided a two-year compliance period through August 25, 2025, after which a physical secondary barrier meeting the requirements of the rule is required for any transport category airplane manufactured and used in regularly scheduled passenger-carrying operations.
−Removed: Compliance with this rule could impose substantial costs on the Company.
−Removed: Per the 2024 Reauthorization Act, the FAA convened an Aviation Rulemaking Committee (“ARC”) in the fall of 2024 to explore additional requirements to retrofit a secondary barrier on existing mainline airliners.
−Removed: Depending on the ARC’s recommendations, the FAA may initiate rulemaking on a retrofit mandate in 2025, which could apply to the Company’s current fleet.
−Removed: In addition, the 2024 Reauthorization Act, like the FAA Reauthorization Act of 2018, contains provisions directing the FAA to examine whether to issue new regulations establishing minimum dimensions for seat size based on safety and evacuation considerations.
−Removed: Since 2022, the FAA has examined the issue and solicited stakeholder feedback on the topic.
−Removed: The FAA has not yet issued a proposed rule.
−Removed: If the FAA issues a rule with minimum dimensions that exceed the Company’s current seat dimensions, the Company could incur substantial compliance costs.
−Removed: In addition to its day-to-day management of the nation’s air traffic control system, the FAA has continued its lengthy and ongoing effort to implement a multi-faceted, airspace modernization program, NextGen.
−Removed: According to the U.S.
−Removed: government, once fully implemented, NextGen is expected to improve airspace capacity and contribute to a safer, more efficient, and more predictable system, which may potentially contribute to reduced fuel burn, emissions, and noise.
−Removed: As part of the NextGen initiative, in 2010 the FAA published rules requiring most commercial aircraft operating in the national airspace system to be equipped with Automatic Dependent Surveillance - Broadcast (“ADS-B”) technology by January 1, 2020.
−Removed: ADS-B technology is intended to enhance safety and efficiency by moving from ground-based radar and navigational aids to precise tracking using satellite signals.
−Removed: In addition to environmental and efficiency benefits, ADS-B technology gives pilots and air traffic controllers new tools to reduce the risk of runway incursions and aircraft collisions.
−Removed: The Company has implemented technology and programs intended to comply with all applicable ADS-B requirements.
−Removed: On November 9, 2021, the U.S.
−Removed: government announced an Aviation Climate Action Plan to reduce emissions by, among other initiatives and efforts, operationalizing NextGen to realize the full potential of modernized infrastructure and systems, and enhancing data quality and information distribution to enable operators to fly more fuel-efficient trajectories.
−Removed: However, with the new presidential administration, this initiative may be postponed.
−Removed: The Air Traffic Organization (“ATO”) is the operational arm of the FAA.
−Removed: The ATO is responsible for providing safe and efficient air navigation services to all of the United States and large portions of the Atlantic and Pacific Oceans.
−Removed: The Company is subject to any operational changes imposed by the FAA/ATO as they relate to the NextGen program, as well as the day-to-day management of the air traffic control system.
+Added: The FAA may also require airplane manufacturers to retrofit airplanes to address safety concerns, which could impose substantial costs on the Company.
+Added: For example, the FAA has finalized a rule requiring commercial aircraft manufactured after August 2025 to have a physical secondary barrier installed between the aircraft’s flight deck and cabin to provide additional protection against unauthorized access to the flight deck.
+Added: The Company is currently installing these modifications on new deliveries of its aircraft.
+Added: The FAA may also issue regulations requiring installation of secondary barriers on existing commercial aircraft that were manufactured prior to August 2025, which would impose significant costs on the Company.
+Added: The FAA also manages the nation’s ATC system.
+Added: government and the airline industry are increasingly focused on addressing persistent shortages of fully licensed and trained air traffic controllers, as well as modernizing the ATC system through large-scale capital projects.
+Added: Congress allocated approximately $12.5 billion in 2025 for the FAA to replace outdated technology and infrastructure and recruit and train controllers.
+Added: Controller shortages and inefficiencies in the ATC system have caused air carrier delays and cancellations, which may significantly impact the Company’s operations and cost.
+Added: Additionally, the FAA has continued its ongoing effort to implement a multi-faceted, airspace modernization program.
+Added: The Company has implemented technology and programs intended to comply with applicable requirements, but continued compliance and future equipage mandates could impose substantial costs on the Company.
+Added: The Company is subject to any operational changes imposed by the FAA as they relate to the modernization program or otherwise.
Passenger and Occupational Health Regulation
The Company is subject to various other federal, state, and local laws and regulations relating to health and occupational safety, including Department of Health and Human Services, Centers for Disease Control and Prevention, Occupational Safety and Health Administration, and Food and Drug Administration regulations.
−Removed: In response to the COVID-19 pandemic, federal, state, and local government authorities implemented directives, orders, and regulations intended to mitigate the spread of the virus, and in response, the Company modified its practices, policies, and procedures, as appropriate.
−Removed: New health requirements or standards, whether mandated by government agencies or voluntarily adopted by the Company, related to the COVID-19 pandemic or otherwise intended to mitigate the spread of communicable diseases could affect the Company’s costs and performance.
+Added: New health requirements or standards, whether mandated by government agencies or voluntarily adopted by the Company, could affect the Company’s costs and performance.
Security Regulation
−Removed: Pursuant to the Aviation and Transportation Security Act (“ATSA”), the Transportation Security Administration (“TSA”), a federal agency of the U.S.
−Removed: Department of Homeland Security, is responsible for certain civil aviation
−Removed: security matters.
−Removed: The ATSA and subsequent TSA regulations and procedures implementing the ATSA and related statutes address, among other things, (i) flight deck security;
+Added: The TSA and the CBP are responsible for certain civil aviation security matters affecting U.S.
+Added: air carriers.
+Added: TSA regulations and procedures address, among other things, (i) flight deck security;
(ii) the use of federal air marshals onboard flights;
6 unchanged sentences
and (ix) certain cybersecurity requirements.
−Removed: Under the ATSA, substantially all security officers at airports are federal employees, and significant other elements of airline and airport security are overseen and performed by federal employees, including federal security managers, federal law enforcement officers, and federal air marshals.
−Removed: TSA personnel and TSA-mandated security procedures can affect the Company's operations, costs, and Customer Experience.
−Removed: For example, as part of its security measures, the TSA regulates the types of liquid items that can be carried onboard aircraft.
−Removed: In addition, as part of its Secure Flight program, the TSA requires airlines to collect a passenger's full name (as it appears on a government-issued ID), date of birth, gender, and Redress Number (if applicable).
−Removed: Airlines must transmit this information to Secure Flight, which uses the information to perform matching against terrorist watch lists.
−Removed: After matching passenger information against the watch lists, Secure Flight transmits the matching results back to airlines.
−Removed: This serves to identify individuals for more extensive security screening and to prevent individuals on watch lists from boarding an aircraft.
−Removed: It also helps prevent the misidentification of passengers who have names similar to individuals on watch lists.
−Removed: The TSA's multi-layered, risk-based approach to airport security also includes physical pat down procedures at security checkpoints.
−Removed: These procedures have raised privacy concerns by some air travelers and have caused delays at screening checkpoints.
−Removed: The Company, in conjunction with the TSA, participates in TSA PreCheck™, a pre-screening initiative that allows passengers deemed low risk by the TSA to move through security checkpoints with greater efficiency and ease when traveling.
−Removed: Eligible passengers may use dedicated screening lanes at certain airports the Company serves for screening benefits, which include leaving on shoes, light outerwear, and belts, as well as leaving laptops and permitted liquids in carryon bags.
−Removed: A similar CBP-administered program, Global Entry ® , allows expedited clearance for pre-approved, low-risk international travelers upon arrival in the United States.
−Removed: The TSA has expressed its plans to leverage advanced transportation security screening technologies, including biometric solutions, to improve security effectiveness and operational efficiency, while also enhancing the passenger experience.
−Removed: The advanced technologies have prompted privacy, cost, and legal concerns from air carriers, travelers, and advocacy groups, which could affect the timing and viability of the TSA's plans.
−Removed: The Company also participates in the TSA Known Crewmember ® program, which is a risk-based screening system that enables TSA security officers to positively verify the identity and employment status of flight-crew members.
−Removed: The program expedites flight crew member access to sterile areas of airports.
−Removed: The Company works collaboratively with the TSA, foreign national governments, and airports to provide risk-based security measures at international locations served by the Company.
−Removed: The Company has also made significant investments in facilities, equipment, and technology to process Customers, checked baggage, and cargo efficiently in compliance with applicable security regulations.
−Removed: However, the Company is not able to predict the impact, if any, t hat any new security measures or TSA resource limitations at certain airports will have on Passenger revenues and the Company’s costs, either in the short-term or the long-term.
+Added: The CBP is the federal agency charged with facilitating international trade, collecting import duties, and enforcing U.S.
+Added: regulations with respect to trade, customs, and immigration.
+Added: TSA or CBP personnel and mandated security procedures can affect the Company's operations, costs, and Customer Experience.
+Added: For example, as part of its security measures, the TSA requires airlines to collect passengers’ personal information to identify individuals for more extensive security screening, which has raised privacy concerns by some air travelers.
+Added: TSA and CBP procedures and lack of sufficient numbers of personnel have also caused delays at screening checkpoints.
+Added: The TSA has expressed its plans to leverage advanced transportation security screening technologies, including biometric solutions, to improve security effectiveness and operational efficiency.
+Added: The advanced technologies have prompted privacy, cost, and legal concerns from air carriers, travelers, and advocacy groups.
+Added: The Company works collaboratively with the TSA, CBP, foreign governments, and airports to provide risk-based security measures at international locations served by the Company.
+Added: The Company has also made significant investments in facilities, equipment, and technology to inspect and process Customers, checked baggage, and cargo efficiently in compliance with applicable security regulations.
+Added: However, the Company is not able to predict the impact, if any, that any new security measures or TSA or CBP resource limitations at certain airports will have on Passenger revenues and the Company’s costs, either in the short-term or the long-term.
Environmental Regulation
−Removed: The Company is subject to various federal laws and regulations relating to the protection of the environment, including the Clean Air Act, the Resource Conservation and Recovery Act, the Clean Water Act, the Safe Drinking Water Act, and the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), as well as state and local laws and regulations.
+Added: The Company is subject to various federal laws and regulations relating to the protection of the environment, including the Clean Air Act, the Resource Conservation and Recovery Act, the Clean Water Act, the Safe Drinking Water Act, and the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), as
+Added: well as state and local laws and regulations.
These laws and regulations govern aircraft drinking water, emissions, storm water discharges from operations, and the disposal of materials such as jet fuel, chemicals, hazardous waste, and aircraft deicing fluid.
−Removed: Additionally, in conjunction with airport authorities, other airlines, and state and local environmental regulatory agencies, the Company, as a normal course of business, undertakes voluntary investigation or remediation of soil or groundwater contamination at various airport sites.
+Added: In conjunction with airport authorities, other airlines, and state and local environmental regulatory agencies, the Company, as a normal course of business, undertakes voluntary investigation or remediation of soil or groundwater contamination at various airport sites.
The Company has not historically experienced any airport site environmental liability that has had a material adverse effect on its capital expenditures, earnings, or competitive position.
−Removed: However, many airports, as well as federal, state, and local governmental authorities, are increasingly focused on groundwater contamination caused by what are sometimes referred to as “forever chemicals,” most notably per- and polyfluoroalkyl substances (“PFAS”).
−Removed: PFAS have been used in many manufacturing and industrial applications over many decades and can be found in numerous products, including building materials and household products.
−Removed: Most notably for aviation, PFAS are a key component in aqueous film-forming foam (“AFFF”), which are commonly available for use to fight petroleum-based fires at both commercial and military aviation facilities.
−Removed: The FAA and the U.S.
−Removed: Department of Defense have strict performance specifications for fire suppression systems, which has contributed to the use of AFFF/PFAS over the decades.
−Removed: PFAS is now the focus of regulatory oversight at airports, as well as the source of litigation by airports against AFFF manufacturers.
−Removed: Moreover, regulatory authorities at the federal, state, and local levels are moving forward with prohibitions on the manufacturing, use, or sale of PFAS-based AFFF, as well as costly remediation efforts at airports to address groundwater contamination.
−Removed: In addition, in April 2024, the U.S.
−Removed: Environmental Protection Agency (the “EPA”) issued a final rule listing two specific types of PFAS, perfluorooctanoic acid (“PFOA”) and perfluorooctanesulfonic acid (“PFOS”), which may be found in AFFF, as hazardous substances under CERCLA and requiring entities to report releases that meet or exceed the reportable quantity immediately to the EPA’s National Response Center, and any other applicable state or local agencies.
−Removed: Accompanying the final rule, the EPA also separately issued an enforcement discretion policy that describes how the EPA intends to generally seek to impose liability under CERCLA on those responsible for releasing or exacerbating the spread of PFAS into the environment, such as those who have manufactured PFAS or used PFAS in the manufacturing process, and other industrial parties.
−Removed: At this time, the Company cannot predict to what extent, if any, this enforcement discretion may ultimately provide any relief from potential PFAS liability.
−Removed: Furthermore, while the new presidential administration is expected to generally pursue a deregulatory agenda, the Company cannot predict what actions the new administration may take with respect to PFAS regulation and the timing and scope of any such changes.
−Removed: The evolving legal and regulatory activity surrounding PFAS could lead to an inadequate supply of FAA-certified AFFF throughout the aviation system, additional costs associated with transitioning away from AFFF products containing PFOA and PFOS, potential environmental incident prevention or cleanup costs, and/or increased operating costs at certain airports.
+Added: However, many airports, as well as federal, state, and local governmental authorities, are increasingly focused on groundwater contamination caused by per- and polyfluoroalkyl substances (“PFAS”).
+Added: PFAS are a key component in foam used to fight petroleum-based fires at both commercial and military aviation facilities.
+Added: Regulatory authorities at the federal, state, and local levels are moving forward with prohibitions on the manufacturing, use, or sale of PFAS-based foam, as well as costly remediation efforts at airports to address groundwater contamination.
+Added: In April 2024, the U.S.
+Added: Environmental Protection Agency (the “EPA”) issued a final rule listing two specific types of PFAS as hazardous substances under CERCLA and requiring entities to report releases that meet or exceed a reportable quantity to the EPA and applicable state and local agencies.
+Added: The evolving legal and regulatory activity surrounding PFAS could lead to an inadequate supply of FAA-certified firefighting foam throughout the aviation system, additional costs associated with transitioning away from products containing PFAS, potential environmental incident prevention or cleanup costs for historic use of hazardous substances, and/or increased operating costs at certain airports.
Moreover, listing PFAS compounds under CERCLA may give rise to strict, joint and several liability for removal, remedial, response, and other costs, the costs of which could be material.
−Removed: The federal government and the United Nations’ International Civil Aviation Organization (“ICAO”) have agreed to a series of measures to reduce GHG emissions within the aviation sector.
−Removed: At the federal level, in July 2016, the EPA issued a final endangerment finding for GHG emissions from certain types of aircraft engines, which the agency determined contribute to pollution that causes climate change and endangers public health and the environment.
−Removed: Following this endangerment finding, per the federal Clean Air Act, the EPA adopted aircraft GHG emissions standards in December 2020.
−Removed: These standards apply to airframe and aircraft engine manufacturers and align with the standards previously adopted by ICAO.
+Added: Members of the United Nations’ International Civil Aviation Organization (“ICAO”) have agreed to a series of measures to reduce GHG emissions within the aviation sector.
+Added: At the federal level, the EPA adopted aircraft GHG emissions standards in December 2020, which apply to airframe and aircraft engine manufacturers and align with the standards previously adopted by ICAO.
+Added: The FAA finalized these standards in February 2024, mandating improved fuel efficiency certification regulations for airplanes manufactured after January 1, 2028.
The Company has not and does not expect to incur any material costs related to the EPA’s aircraft GHG emissions rules at this time, and the rules are not expected to adversely impact the Company's current aircraft fleet;
however, the Company cannot guarantee that more stringent standards will not be adopted by Congress, the FAA, or the EPA in the future that could require material capital expenditures to modernize or replace its aircraft fleet or incur other costs related to GHG emissions from its aircraft.
−Removed: In addition to aircraft emissions standards, ICAO implemented a “global market-based measure” framework in an effort to control carbon dioxide emissions from international aviation.
−Removed: The focal point of this framework is a carbon offsetting system applicable to aircraft operators designed to cap the growth of emissions related to international aviation.
−Removed: ICAO's Carbon Offsetting and Reduction Scheme for International Aviation (“CORSIA”) program is a global market-based measure intended to cap carbon emissions from international civil aviation at their 2019 levels from 2021 to 2023 and 85 percent of their 2019 levels from 2024 to 2035, addressing carbon emissions from the growth of international air traffic by requiring that international aviation emissions above these levels be offset or reduced through the use of CORSIA Eligible Fuel, such as a CORSIA SAF, or CORSIA Eligible Emissions Units.
−Removed: federal government has opted to participate in the voluntary phases of the CORSIA program from 2021-2026 (additional phases extend through 2035).
−Removed: However, it is unclear at this time whether the new presidential administration will take action to limit the implementation of the mandatory phases beginning in 2027.
−Removed: For example, on January 20, 2025, President Trump issued an Executive Order withdrawing from the Paris Agreement and, at this time, it is unclear what impact this action may have on the United States’ participation in CORSIA in the short term.
−Removed: As part of the CORSIA program, the Company is currently monitoring its international emissions for reporting purposes.
−Removed: Data collected from applicable international flight activity in 2019 forms the baseline and is used in the calculations to determine subsequent carbon offsetting requirements under the CORSIA program.
−Removed: To the extent CORSIA revises any of its emission accounting methodologies or options for meeting emission reduction levels, the Company could face increased costs to purchase additional volumes of SAF, carbon offsets, or take other measures to comply with the CORSIA program.
−Removed: To date, the Company has not incurred any material costs related to its compliance with CORSIA;
−Removed: however, the Company could experience material costs as a result of any future expansion of its international operations, which would increase its compliance obligations under CORSIA, the need to purchase additional carbon offsets or volumes of SAF than what the Company has currently projected based on any changes to the CORSIA program, any similar program, or other unforeseeable reasons given the evolving nature of climate-change-related laws, regulations, and programs.
−Removed: Regardless of the method of regulation or application of CORSIA, further policy changes with regard to climate change are possible, which could significantly increase operating costs in the airline industry and, as a result, adversely affect operations.
−Removed: Until the timing, scope, and extent of such future developments become known, the Company cannot predict their effect on the Company’s cost structure or its operating results.
−Removed: There are additional areas of rulemaking occurring at the state and federal levels with respect to climate-change-related matters that could also increase the Company’s compliance obligations and costs and expenditures related to the same.
−Removed: While there have been a number of federal efforts to require the disclosure of certain climate-related information in recent years, and there may be similar efforts to require such disclosures in the future, the new presidential administration is expected to repeal or otherwise reverse these efforts.
−Removed: Moreover, on his first day in office, on January 20, 2025, President Trump issued an Executive Order reversing many of the climate-related actions of the previous administration.
−Removed: However, to the extent any future rules mandate that the Company make additional disclosure on matters related to climate change, it is possible that such disclosures may result in reputational harm or impact lending or investment decisions of third parties.
−Removed: If the Company is not perceived as meeting any climate change-related standards established by such third parties, the Company could face greater restrictions on or increased costs of access to capital.
−Removed: For example, in March 2024, the U.S.
−Removed: Securities and Exchange Commission (“SEC”) adopted a new rule called, “The Enhancement and Standardization of Climate-Related Disclosures for Investors.” This rule is being challenged legally in the U.S.
−Removed: Court of Appeals for the Eighth Circuit and implementation of the rule has been voluntarily stayed by the SEC pending the outcome of the legal challenge;
−Removed: moreover, the SEC may seek to repeal or revise the rule, though the Company cannot predict whether or how such action would occur or its timing.
−Removed: Should the rule be implemented as finalized, however, the rule would place new requirements on Southwest and other large publicly-traded corporations.
−Removed: For instance, the rule requires a domestic or foreign registrant to include certain climate-related information in its registration statements and periodic reports, such as on Form 10-K, including:
−Removed: (i) climate-related risks and their actual or likely material impacts on the registrant’s business, strategy, and outlook;
−Removed: (ii) the registrant’s governance of climate-related risks and relevant risk management processes;
−Removed: (iii) the registrant’s GHG emissions, which for accelerated and large accelerated filers and with respect to certain emissions would be subject to assurance;
−Removed: (iv) certain climate-related financial statement metrics and related disclosures in a note to its audited financial statements;
−Removed: and (v) information about climate-related targets and goals, and transition plan, if any.
−Removed: Additionally, in 2023, the State of California enacted a number of climate-disclosure related laws, including the Climate Corporate Data Accountability Act (“CCDAA”) and Climate-Related Financial Risk Act (“CRFRA”).
−Removed: The CCDAA requires both public and private U.S.
−Removed: companies that are “doing business in California” and that have a total annual revenue of $1 billion to publicly disclose and verify, on an annual basis, Scopes 1, 2 and 3 GHG emissions.
−Removed: The CRFRA requires the disclosure of a climate-related financial risk report (in line with the Task Force on the Climate-related Financial Disclosures recommendations or equivalent disclosure requirements under the International Sustainability Standards Board’s climate-related disclosure standards) every other year for public and private companies that are “doing business in California” and have total annual revenue of $500 million.
−Removed: Reporting under the CCDAA and CRFRA is scheduled to take effect
−Removed: beginning in 2026.
−Removed: The ultimate impact of these laws on the Company remains uncertain and the California Air Resources Board (“CARB”) is presently soliciting comments on certain of the rule’s details, so the specific final requirements may not be known for some time.
−Removed: Furthermore, each of these laws has been subject to legal challenge.
−Removed: While the outcome of such challenge is uncertain at this time, the judge in the case has declined to grant a temporary injunction of the laws while the litigation moves forward.
−Removed: Additionally, in October 2023, California also enacted the Voluntary Carbon Markets Disclosure Act (“VCMDA”) which creates new reporting obligations related to voluntary carbon offsets.
−Removed: The VCMDA requires business entities that (i) market or sell voluntary carbon offsets in California, (ii) purchase or use voluntary carbon offsets sold in California that make emissions-related claims, or (iii) make claims that an entity or product has eliminated or made significant reductions to its carbon dioxide or GHG emissions to make certain public disclosure on the business entity’s website.
−Removed: Furthermore, climate-related laws are presently being developed in the legislatures of several U.S.
−Removed: states and the timing and scope of such legislation, if passed into law, is uncertain at this time.
−Removed: The reporting obligations of the CCDAA, CRFRA, VCMDA, and other state or federal laws or rules requiring the disclosure of climate-related risks may cause the Company to incur increased costs with respect to modifying existing disclosure controls, financial reporting practices, and the gathering and reporting of emissions data.
−Removed: In addition, failure to comply with these disclosure laws and regulations could result in the imposition of substantial fines or penalties.
−Removed: The Company could also face increased risks of litigation resulting from any enhanced disclosure requirements related to climate change.
+Added: The Company may also face new regulation of aircraft emissions in the U.S.
+Added: or internationally, potentially subjecting the Company to further taxes, environmental fees, or requirements to obtain permits or offsets for GHG emissions in certain jurisdictions.
+Added: In addition to aircraft emissions standards, ICAO has adopted its Carbon Offsetting and Reduction Scheme for International Aviation (“CORSIA”) program, a global market-based measure intended to cap carbon emissions from international civil aviation at their 2019 levels from 2021 to 2023 and 85 percent of their 2019 levels from 2024 to 2035.
+Added: CORSIA calls for international aviation emissions above these levels to be offset or reduced through the use of carbon offsets or eligible sustainable fuels.
+Added: has not enacted legislation to implement CORSIA.
+Added: However, the Company is voluntarily monitoring its international emissions for reporting purposes and to determine carbon offsetting requirements under the CORSIA program.
+Added: The future costs of adhering to CORSIA are uncertain, and the Company could face increased costs to purchase additional volumes of SAF or carbon offsets, or to take other measures to adhere to the CORSIA program or other similar climate-change related mandates in the future.
+Added: To date, the Company has not incurred any material costs related to CORSIA;
+Added: however, the Company could experience material costs as a result of future changes to the CORSIA program or the expansion of its international operations, which could increase its potential obligations under CORSIA.
+Added: The federal government and several U.S.
+Added: states have also enacted or proposed climate-related disclosure laws that would require the Company to evaluate and report climate-related risks.
+Added: For example, the State of California requires reporting related to voluntary carbon offsets, and the Securities and Exchange Commission has considered new rules requiring disclosure of certain climate-related information.
+Added: California has also enacted climate-disclosure laws which are subject to legal challenge and would require the Company to disclose GHG emissions and a climate-
+Added: related financial risk report.
+Added: The timing and scope of future legislation, if passed into law, is uncertain at this time.
+Added: The reporting obligations of state or federal laws or rules requiring the disclosure of climate-related risks may cause the Company to incur increased costs with respect to modifying existing disclosure controls, financial reporting practices, and the gathering and reporting of emissions data.
For further discussion of the risks relating to these reporting obligations, see “Risk Factors—Legal, Regulatory, Compliance, and Reputational Risks.”
−Removed: On November 12, 2022, the Biden-Harris Administration proposed the Federal Supplier Climate Risks and Resilience Rule, which would require major federal contractors to publicly disclose their greenhouse gas emissions and climate-related financial risks and set science-based emissions reduction targets verified by the Science-Based Target initiative and in accordance with third-party standards that preclude the use of carbon offsets to achieve emission reduction goals.
−Removed: On January 13, 2025, the proposed rule was withdrawn.
−Removed: However, there may be similar efforts to require such disclosures in the future and compliance with similar rules could require the Company to incur increased costs due to increased reporting obligations, modify its operations to meet emissions reduction targets, accelerate its fleet replacement plans, or otherwise revise or restate its existing sustainability goals.
−Removed: In addition to climate change, aircraft noise continues to be an environmental focus, especially as the FAA implements new flight procedures as part of its NextGen airspace modernization program discussed above.
−Removed: The Airport Noise and Capacity Act of 1990 gives airport operators the right, under certain circumstances, to implement local noise abatement programs, provided they do not unreasonably interfere with interstate or foreign commerce or the national air transportation system and meet other requirements.
+Added: In addition to climate change, aircraft noise continues to be an environmental focus.
+Added: The Airport Noise and Capacity Act of 1990 gives airport operators the right, under certain circumstances, to implement local noise abatement programs.
Some airports have established airport restrictions to limit noise, including restrictions on aircraft types to be used and limits on the number of hourly or daily operations or the time of operations.
−Removed: These types of restrictions can cause curtailments in service or increases in operating costs, limit the ability of air carriers to expand operations at the affected airports, and result in civil fines when operators violate curfews or noise limitations.
−Removed: At the federal level, the FAA has committed to inform and involve the public, engage with communities, and give meaningful consideration to community concerns and views when developing new flight procedures, and there is a possibility that Congress may enact legislation in the future to address local noise concerns at one or more commercial airports in the United States.
−Removed: In addition, the FAA Reauthorization Act of 2018 requires the FAA to consider community noise concerns when proposing a new navigation departure procedure or amending an existing navigation procedure that would direct aircraft over noise sensitive areas.
−Removed: This requirement could delay or otherwise impede the implementation or use of more efficient flight paths.
−Removed: In general, government efforts at the international, federal, state, or local levels to address worldwide climate change, manage GHG emissions, and reduce aircraft noise, to the extent pursued or implemented, could affect the Company, aircraft operators, original equipment manufacturers, producers and sellers of aviation fuel, and other third parties on which the Company is dependent.
−Removed: Additional legislative or regulatory activity in this area could require modifications to the Company’s equipment, operations, and strategy, and have a material effect on the Company's capital expenditures, earnings, or competitive position.
+Added: Foreign governments may enact or allow airports to enact similar restrictions.
+Added: These types of restrictions can cause curtailments in service or increases in operating costs, limit the ability of air carriers to expand operations at the affected airports, block access for new entrants, impede the implementation or use of more efficient flight paths, and result in civil fines when operators violate curfews or noise limitations.
+Added: Government efforts at the international, federal, state, or local levels to address worldwide climate change, manage GHG emissions, and reduce aircraft noise, to the extent pursued or implemented, could affect the Company, aircraft operators, original equipment manufacturers, producers and sellers of aviation fuel, and other third parties on which the Company is dependent.
+Added: Additional legislative or regulatory activity in this area could require modifications to the Company’s equipment, operations, and strategy, and could have a material effect on the Company's capital expenditures, earnings, or competitive position.
+Added: The Company does not currently expect any such effects to be material.
+Added: However, until the timing, scope, and extent of such future developments become known, the Company cannot accurately predict their effect on the Company’s cost structure or its operating results.
Data Privacy and Cybersecurity Regulation
−Removed: The data privacy and cybersecurity regulatory landscape has become increasingly complex with a growing patchwork of legal obligations that require engaging with an increasing number of regulators.
−Removed: Additionally, the interpretation and application of many data privacy and cybersecurity legal obligations is rapidly evolving, non-uniform, and may be subject to significant change.
−Removed: Interpretation of data privacy and cybersecurity legal obligations may also be applied inconsistently across jurisdictions.
−Removed: The Company continues to monitor a growing set of data privacy and cybersecurity legal requirements from a growing number of applicable authorities and regulators.
+Added: The Company is subject to increasingly complex legislative, regulatory, and customer expectations related to data privacy, AI, and cybersecurity risk management across a variety of domestic and international jurisdictions.
+Added: Existing and evolving requirements could result in risks or challenges such as expanded compliance burdens, operational changes, and enforcement risks for the Company.
For further discussion of the risks relating to data privacy and cybersecurity, see “Risk Factors—Information Technology, Cybersecurity, and Data Privacy Risks.”
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In some cases, such laws and regulations can be enforced by private parties in addition to regulators.
−Removed: The Company processes, stores, or transmits sensitive data that includes information such as Customer or Employee data, credit card numbers, and other personally identifiable information for a variety of business purposes.
+Added: The Company processes, stores, and transmits sensitive data that includes information such as Customer and Employee data, credit card numbers, sensitive security information, and other regulated information for a variety of business purposes.
The Company, therefore, is subject to various risks and costs associated with such activities, including costs associated with compliance with U.S.
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Failure to maintain PCI DSS compliance or the compromise of cardholder data that the Company processes, stores, or transmits could result in costs, fees, fines, penalties, and restrictions on the Company’s ability to process payment card transactions, which could materially impact operations and Customer Experience.
−Removed: Furthermore, as the Company enters into airline partnerships with international carriers, the Company will need to comply with foreign laws like the EU's General Data Protection Regulation in certain scenarios, which could impose additional data privacy and security requirements upon the Company along with significant compliance obligations and substantial penalties for non-compliance.
−Removed: The Company has experienced heightened legislative and regulatory focus on cybersecurity from a critical infrastructure perspective, a federal contractor perspective, and broadly applicable cybersecurity legal obligations.
−Removed: As a result, the Company must comply with a developing set of cybersecurity requirements, including but not limited to incident and other reporting, internal and external coordination, affirmative risk‑management obligations, compliance, and technical requirements related to information technology systems and operational technology systems.
−Removed: For example, in March 2023, the TSA issued emergency cybersecurity program changes applicable to TSA-regulated airport and aircraft operators, including the requirement to develop a TSA-approved cybersecurity implementation plan describing measures taken to improve cybersecurity and to assess the effectiveness of those measures on an ongoing basis.
−Removed: The TSA also continues to make significant cybersecurity program changes.
−Removed: In December 2023, the SEC’s new rules on cybersecurity risk management, strategy, governance, and incident disclosure became effective.
−Removed: For additional information, see Item 1C – “Cybersecurity.” The 2024 Reauthorization Act required the FAA to create a Civil Aviation Cybersecurity Rulemaking Committee by May 2025 to conduct reviews, develop findings, and make recommendations on cybersecurity standards for civil aircraft, aircraft ground support information systems, airports, air traffic control mission systems, and aeronautical products and articles.
−Removed: Depending on the rulemaking committee's recommendations, the FAA could issue additional cybersecurity rulemaking directly applicable to air carriers, aircraft and product manufacturers, and other industry stakeholders.
−Removed: Additionally, there are emerging regulations and state laws around AI, including those in California and Colorado, that may soon require companies that develop or deploy AI systems to establish formal governance structures and
−Removed: internal controls, including designated oversight personnel, documented risk assessment procedures, and regular compliance reviews of their AI systems.
−Removed: The Company expects federal, state, and other governments to assess and implement increasingly complex data privacy and cybersecurity legal obligations, which could result in expanded compliance burdens, costs, and enforcement risks for the Company.
+Added: As the Company expands into new locations, enters international partnerships, and participates in other global activities, it may be required to comply with foreign laws like the EU's General Data Protection Regulation, which could impose additional data privacy and cybersecurity requirements upon the Company along with significant compliance obligations and substantial penalties for non-compliance.
+Added: The Company is subject to broadly applicable cybersecurity legal obligations and has experienced heightened legislative and regulatory focus on cybersecurity due to its designation as critical infrastructure and its federal contractor status.
+Added: The Company must comply with a developing set of cybersecurity requirements, including, but not limited to, reporting obligations, technical security measures, internal and external coordination, cyber-related risk‑management and governance obligations, and other compliance requirements related to information technology systems and operational technology systems.
+Added: In 2025, the Company completed a series of distinct cybersecurity inspections conducted by the TSA, FAA, and Department of Defense, each designed to assess compliance with their respective regulatory requirements.
+Added: Failure to comply with emerging cybersecurity obligations or to address identified gaps could lead to enforcement actions, monetary penalties, operational limitations, or reputational damage.
+Added: Additionally, there are emerging regulations and state laws around AI, including those in California and Colorado, that may soon require companies that develop or deploy AI systems to establish formal governance structures and internal controls, including designated oversight personnel, documented risk assessment procedures, and regular compliance reviews of their AI systems.
+Added: The Company has established an internal AI governance team, and the Company’s Board of Directors oversees AI risks through its Audit Committee and at the full Board level.
+Added: AI usage and governance continues to evolve, and the Company may become subject to regulations that effect its operations and increase its costs.
International Regulation
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Foreign regulatory agencies located in jurisdictions served by the Company can impose requirements on various aspects of the Company’s business, including safety, marketing, ticket sales, staffing, and tax.
+Added: Foreign countries may also enact passenger protection rules similar to or exceeding the DOT’s rules, which could impose additional costs and liabilities on the Company.
The Company has obtained the necessary economic authority from the DOT, as well as approvals required by the FAA and applicable foreign government entities, to conduct operations, under certain circumstances, to points outside of the continental United States currently served by the Company.
Certain international authorities and approvals held by the Company are subject to periodic renewal requirements.
−Removed: The Company requests extensions of such authorities and approvals when and as appropriate.
To the extent the Company seeks to serve additional foreign destinations in the future, or to renew its authority to serve certain routes, it may be required to obtain necessary authority from the DOT and/or approvals from the FAA, as well as any applicable foreign government entity.
−Removed: Certain international markets are governed by bilateral air transportation agreements between the United States and foreign countries.
+Added: To the extent the Company expands its international flight offerings, CBP and its requirements and resources will also become increasingly important considerations to the Company.
+Added: Certain international markets are governed by bilateral air transportation agreements between the United States and foreign countries, which may be subject to renegotiation or reinterpretation from time to time.
Changes in U.S.
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There are also capacity limitations at certain international airports, which could impact future service levels.
−Removed: In general, bilateral agreements between the United States and foreign countries the Company currently serves, or may serve in the future, may be subject to renegotiation or reinterpretation from time to time.
While the U.S.
−Removed: government has negotiated “open skies” agreements with many countries, which allow for unrestricted access between the United States and respective foreign destinations, agreements with other countries may restrict the Company's entry into those destinations and/or its related growth opportunities.
−Removed: The CBP is the federal agency of the U.S.
−Removed: Department of Homeland Security charged with facilitating international trade, collecting import duties, and enforcing U.S.
−Removed: regulations with respect to trade, customs, and immigration.
−Removed: To the extent the Company expands its international flight offerings, CBP and its requirements and resources will also become increasingly important considerations to the Company.
−Removed: For instance, with the exception of flights from a small number of foreign “preclearance” locations, arriving international flights may only land at CBP-designated airpo rts, and CBP officers must be present and in sufficient numbers at those airports to effectively process and inspect arriving international passengers, baggage, and cargo.
−Removed: Thus, CBP personnel and CBP-mandated procedures can affect the Company's operations, costs, and Customer Experience.
−Removed: The Company has made significant investments in facilities, equipment, and technologies at certain airports in order to improve the Customer Experience and to assist CBP with its inspection and processing duties;
−Removed: however, the Company is not able to predict the impact, if any, that various CBP measures or the lack of CBP resources will have on the Company's revenues and costs, either in the short-term or the long-term.
+Added: government has negotiated “open skies” agreements with many countries, which allow for reciprocal unrestricted access between the United States and respective foreign destinations, airport gate and/or limitations on commercially viable slot times may impede the Company’s service or growth.
+Added: Further, agreements with other non-open skies countries may restrict or limit the Company's entry into those destinations and/or its related growth opportunities.
The Company carries insurance of types customary in the airline industry and in amounts the Company deems adequate to protect the Company and its property and to comply both with applicable regulations and certain of the Company's credit and lease agreements.
−Removed: The policies principally provide coverage for public and passenger liability, property damage, pollution, D&O/fiduciary, cargo and baggage liability, loss or damage to aircraft, engines, and
−Removed: spare parts, and workers’ compensation.
+Added: The policies principally provide coverage for public and passenger liability,
+Added: property damage, pollution, D&O/fiduciary, cargo and baggage liability, loss or damage to aircraft, engines, and spare parts, and workers’ compensation.
In addition, the Company carries a cybersecurity insurance policy with regards to data protection and business interruption associated with both security breaches from malicious parties and from certain system failures.
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Among other things, it has been cyclical, energy intensive, labor intensive, capital intensive, technology intensive, highly regulated, heavily taxed, and extremely competitive.
−Removed: The airline industry has also been particularly susceptible to detrimental events such as economic recessions, jet fuel price volatility, unscheduled maintenance disruptions, outbreaks of disease and/or pandemics, supply chain challenges, U.S.
−Removed: government shutdowns, acts of terrorism or war, geopolitical unrest, severe weather, and natural disasters.
+Added: The airline industry has also been particularly susceptible to detrimental events such as U.S.
+Added: government shutdowns, economic recessions, jet fuel price volatility, unscheduled maintenance disruptions, outbreaks of disease and/or pandemics, supply chain challenges, acts of terrorism or war, geopolitical unrest, severe weather, and natural disasters.
In 2025, the U.S.
−Removed: airline industry continued to face challenges such as inflationary cost pressures (particularly labor costs), delayed aircraft deliveries, shifting travel demand patterns, economic uncertainty, disruptive weather events, and natural disasters.
+Added: airline industry continued to face challenges such as the historically prolonged government shutdown (which impacted key functions such as TSA and the ATC system and mandated industry capacity reductions), inflationary cost pressures (particularly labor costs), delayed aircraft deliveries, shifting travel demand patterns, economic uncertainty, disruptive weather events, and natural disasters.
In response to ever-evolving travel patterns, the Company and several other U.S.
−Removed: airlines have announced route network changes and slower capacity growth for 2025, as compared with 2024.
+Added: airlines implemented route network changes and evaluated capacity.
Competition within the airline industry is intense and highly unpredictable, and Southwest has historically competed with other airlines on virtually all of its scheduled routes.
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Airlines, including Southwest, also compete for customers with alternatives to air travel, such as driving, videoconferencing, and business communication platforms.
−Removed: These communication alternatives have bec ome particularly prevalent post-pandemic.
+Added: These communication alternatives have become particularly prevalent post-pandemic.
Pricing and Cost Structure
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Common efforts include fleet transformation to gain fuel efficiencies, fleet simplification, and increasing the number of seats per trip through seat retrofits and the use of larger aircraft.
−Removed: The Company believes its low-cost operating structure has historically provided it with an advantage over many of its airline competitors by enabling it to continue to charge competitively low fares.
+Added: The Company believes its cost structure has historically provided it with an advantage over many of its airline competitors by enabling it to charge competitive fares, and the Company remains focused on driving efficiencies to offset overall inflationary cost pressures.
Routes, Loyalty Programs, and Schedules
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While the Company has a robust route network in the United States, some major airlines have more extensive global route structures than Southwest, including more extensive international networks.
−Removed: In addition, many competitors have entered into significant commercial relationships with other airlines, such as strategic
−Removed: alliances, code-sharing, and capacity purchase agreements, which increase the airlines' opportunities to expand their route offerings.
−Removed: An alliance or code-sharing agreement enables an airline to offer flights that are operated by another airline and allows the airline’s customers to book travel that includes segments on different airlines through a single reservation or ticket.
−Removed: As a result, depending on the nature of the specific alliance or code-sharing arrangement, a participating airline may be able to, among other things, (i) offer its customers access to more destinations than it would be able to serve on its own, (ii) gain exposure in markets it does not otherwise serve, and (iii) increase the perceived frequency of its flights on certain routes.
+Added: In addition, many competitors have entered into significant commercial relationships with other airlines, such as strategic alliances, code-sharing, and capacity purchase agreements, which increase the airlines' opportunities to expand their route offerings.
+Added: Depending on the nature of the specific alliance, code-sharing arrangement, or capacity purchase agreement, a participating airline may be able to, among other things, (i) offer its customers access to more destinations than it would be able to serve on its own, (ii) gain exposure in markets it does not otherwise serve, and (iii) increase the perceived frequency of its flights on certain routes.
More extensive route structures, as well as alliance and code-sharing arrangements, not only provide additional route flexibility for participating airlines, but they can also allow these airlines to offer their customers more opportunities to earn and redeem loyalty miles or points.
−Removed: A capacity purchase agreement enables an airline to expand its route structure by paying another airline (e.g., a regional airline with smaller aircraft) to operate flights on its behalf in markets that it does not, or cannot, serve itself.
−Removed: In 2024, the Company announced it will pursue partnerships with other airlines in order to further expand the reach of the Company’s network and connect Customers with more global destinations.
−Removed: The Company launched its first such partnership in first quarter 2025 with Icelandair to provide transatlantic connectivity and expects to begin selling and operating interlining flights in February 2025.
−Removed: The Company plans to add at least one more partner during 2025.
+Added: In 2025 and first quarter 2026, the Company launched such partnerships with Icelandair, Hahnair, China Airlines, EVA Air, Philippine Airlines, Condor, and Turkish Airlines to provide transoceanic connectivity.
+Added: The Company is exploring additional gateways with these existing partners, as well as additional partnerships with other airlines, in 2026 in an effort to enhance its route offerings.
Customer Service, Operational Reliability, Product Offerings, and Amenities
Southwest also competes with other airlines with respect to customer service, operational reliability (such as ontime performance), product offerings, and passenger amenities.
−Removed: Southwest competes with airlines that have more seating options and associated passenger amenities, including first class, business class, and other premium seating and related amenities, which can appeal in particular to business customers.
−Removed: The Company believes the introduction of its fares in the Global Distribution Systems, as well as the introduction of assigned and additional legroom seating, provides an opportunity to increase the Company’s market share of business customers.
+Added: Southwest competes with airlines that have more seating options and associated passenger amenities, including first class, business class, and other related amenities, which can appeal in particular to business customers.
+Added: The Company believes the introduction of assigned and extra legroom seating provides an opportunity to increase the Company’s market share of business customers.
+Added: As part of its product offerings evolution, in 2025, the Company also introduced a new, Basic fare product to appeal to Customers who prioritize lower fare price.
New and different types of aircraft flown by competitors could have operational attributes and passenger amenities that could be considered more attractive to certain consumers than those associated with the Company’s existing fleet.
Some of the Company’s competitors have added, and may continue to add, passenger amenities not offered by the Company, including through new aircraft types and configurations.
−Removed: While Southwest has been known for its open seating model, in 2024 the Company announced its intention to assign seats, offer premium seating options with extra leg room, and evolve its boarding processes.
−Removed: The Company also announced a refreshed cabin design, including new, more comfortable RECARO seats .
−Removed: These new initiatives are designed to elevate the Customer Experience and enable the Company to better compete with other airlines’ product offerings and passenger amenities.
−Removed: The anticipated offering of overnight ( i.e.
−Removed: redeye) flights, airline partnerships aimed at delivering international connectivity, and an in-house vacation package product further expand the Company’s competitive product offerings .
−Removed: C arriers are also increasingly focusing on customer-friendly policies as opportunities to win and retain customers.
−Removed: However, the Company believes its Customer Service and Customer-friendly policies (including those listed below) continue to positively differentiate it from many of its competitors.
+Added: While Southwest historically utilized an open seating model, the Company began to assign seats, offer extra legroom seating options, and evolve its boarding processes in January 2026.
+Added: The Company also introduced a refreshed cabin design, and has received initial deliveries of aircraft with new, more comfortable RECARO seats.
+Added: The Company has further expanded its competitive product offerings with redeye flights, airline partnerships aimed at delivering international connectivity, and an in-house vacation package through Getaways.
+Added: These initiatives are designed to elevate the Customer Experience and enable the Company to better compete with other airlines’ product offerings and passenger amenities.
+Added: Carriers are also increasingly focusing on customer-friendly policies as opportunities to win and retain customers.
The Company continuously reviews the effectiveness of its Customer policies in achieving its commercial objectives.
−Removed: • The Company offers up to two free checked bags (subject to weight and size limits) for all ticketed Customers;
−Removed: • The Company offers competitively low fares and does not charge change fees (although fare differences may apply) or cancellation fees (subject to the Company’s No Show policy);
+Added: The Company believes its Customer Service and policies (including those listed below) continue to positively differentiate it from many of its competitors.
+Added: • The Company offers free in-flight Wi-Fi for all Rapid Rewards Members through a partnership with T-Mobile;
+Added: • The Company offers competitive fares and does not charge change fees for most fare products (although fare differences may apply) or cancellation fees (subject to the Company’s No Show policy);
• The Company offers free same-day standby listings (subject to conditions);
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• Rapid Rewards points do not expire.
−Removed: • Flight credits do not expire;
−Removed: • There are no additional fees for items such as soft drinks and snacks where available, curb-side check-in where available, and telephone reservations.
Balance Sheet Health
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The Company believes its strong balance sheet and focus on prudent capital deployment will support its strategic plans and initiatives.
−Removed: The Company intends to preserve the strength of its balance sheet with manageable debt maturities, with the goal of retaining investment-grade ratings.
−Removed: Finally, the Company intends to return value back to its Shareholders through dividends and share repurchases, and will continually review its return of capital program based in large part upon the Company's free cash flow and leverage, and fleet monetization strategy, with an eye to maintaining investment-grade ratings.
+Added: The Company's capital allocation framework supports its continued commitment to a strong and efficient investment-grade balance sheet.
+Added: The Company intends to preserve the strength of its balance sheet through manageable debt maturities and a targeted liquidity balance, comprised of cash and cash equivalents, short-term investments, and a revolving credit line, with the goal of maintaining a targeted leverage ratio of adjusted debt to adjusted earnings before interest, taxes, depreciation, amortization, and rent.
+Added: The Company also intends to continue returning value back to its Shareholders through dividends and opportunistic share repurchases.
+Added: The Company plans to continually review its return of capital program, taking into account the Company’s free cash flow, leverage, and fleet monetization strategy.
Other Forms of Competition
−Removed: Technology advancements have provided alternatives to air travel, such as videoconferencing, business communication platforms, and the Internet, and these alternatives significantly increased in scope during the COVID-19 pandemic.
+Added: Technology advancements have provided alternatives to air travel, such as videoconferencing, business communication platforms, and the Internet, and these alternatives have significantly increased in scope in recent years.
There is risk that the significantly increased use of these alternatives could result in permanent changes to consumer behavior and thereby negatively affect demand for air travel.
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In addition, surface competition can be significant during economic downturns when consumers cut back on discretionary spending and fewer choose to fly, or when gasoline prices are lower, making surface transportation a less expensive option.
−Removed: Because of the relatively high percentage of short-haul travel provided by Southwest, it is particularly exposed to competition from surface transportation in these instances.
+Added: The Company has historically provided a relatively high percentage of short-haul travel, and thus has been particularly exposed to competition from surface transportation in these instances.
The Company's business is ordinarily seasonal.
−Removed: In most markets the Company serves, demand for air travel is greater during the summer months, and, therefore, revenues in the airline industry tend to be stronger in the second (April 1 - June 30) and third (July 1 - September 30) quarters of the year than in the first (January 1 - March 31) and fourth (October 1 - December 31) quarters of the year.
+Added: In most markets the Company serves, demand for air travel has historically been greater, and, therefore, revenues in the airline industry tend to be stronger, during the summer months and peak travel periods, including holidays.
As a result, in many cases, the Company's results of operations reflect this seasonality.
−Removed: Factors that could alter this seasonality include, among others, the price of fuel, general economic conditions, changes in consumer behavior, governmental action, global pandemics, extreme or severe weather and natural disasters, fears of terrorism or war, or changes in the competitive environment.
+Added: Factors that could alter this seasonality include, among others, the price of fuel, general economic conditions, changes in consumer behavior, governmental action, including shutdowns, global pandemics, extreme or severe weather and natural disasters, fears of terrorism or war, or changes in the competitive environment.
Therefore, the Company's quarterly operating results are not necessarily indicative of operating results for the entire year, and historical operating results in a quarterly or annual period are not necessarily indicative of future operating results.
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demographics of Employees, however, the Company looks at total headcount, active and on-leave Employees, irrespective of part-time or full-time status.
+Added: In February 2025, the Company implemented a reduction in workforce, which reduced approximately 1,750 Employee roles, or approximately 15 percent of corporate positions.
+Added: As of December 31, 2025, the Company's number of active full-time equivalent Employees increased by 0.5 percent, year-over-year, due in part to the hiring of full-time equivalent contract Employees.
+Added: The Company plans to continue efforts to right-size staffing, with the goal of running a safe, reliable, and efficient operation.
+Added: Global Innovation Center
+Added: In November 2025, the Company formed Southwest Airlines India Private Limited, a wholly-owned subsidiary, in Hyderabad, India.
+Added: The subsidiary is a Global Innovation Center intended to enhance Southwest’s delivery model by transitioning the delivery of certain critical business functions from the Company’s international vendor network to internal Employees and decreasing the Company’s reliance on existing resources.
Labor Union Activity
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If the parties do not reach agreement during this period, the parties may then engage in “self-help.” “Self-help” includes, among other things, a strike by the union or the airline’s imposition of any or all of its proposed amendments and the hiring of new employees to replace any striking workers.
+Added: Since October 2022, each of the 12 union-represented workgroups have ratified new contracts.
The following table sets forth the Company's Employee groups subject to collective bargaining and the status of their respective collective-bargaining agreements as of December 31, 2025:
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The Company has implemented many programs designed to achieve these priorities, including strong Employee training and benefits programs.
−Removed: The Company's vast Employee training and development opportunities address, among other things, leadership development;
−Removed: the competency of Belonging;
−Removed: and communication skills.
The Company rewards Employees with competitive compensation and benefits packages, including attractive medical plans, the Southwest Airlines Co.
−Removed: Retirement Savings Plan that resulted from the merger of the Company’s former 401(k) plan having a dollar-for-dollar match for Employees other than Pilots (subject to vesting requirements and certain compensation limits) and the Company's former profitsharing plan, and a 401(k) plan with a non-elective Company contribution for Pilots.
+Added: Retirement Savings Plan, which merged the Company’s former 401(k) plan and former profitsharing plan, and a 401(k) plan with a non-elective Company contribution for Pilots.
The Southwest Airlines Co.
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The Company also provides numerous career growth and development resources to diversify skill sets, including in-person or virtual courses and mentorship programs.
−Removed: The Company regularly conducts Employee surveys to assess job satisfaction of its Employees and uses information from the surveys to improve the Company’s ability to attract, develop, and retain talented Employees who will help advance the Company.
−Removed: The Company's number of active full-time equivalent Employees decreased by 3.1 percent, year-over-year, in 2024, as the Company minimized hiring in order to right-size staffing to current operations and lower costs.
−Removed: Since October 2022, each of the 12 union-represented workgroups, that collectively represent approximately 82 percent of the Company's Employees, have ratified new contracts.
−Removed: Diversity, Equity, Inclusion & Belonging (“DEIB”)
+Added: regularly conducts Employee surveys to assess job satisfaction of its Employees and uses information from the surveys to improve the Company’s ability to attract, develop, and retain talented Employees who will help advance the Company.
+Added: Inclusion & Belonging
The Company is committed to being an equal opportunity employer and prohibits all forms of unlawful discrimination in accordance with applicable law.
−Removed: DEIB is a part of the Company’s culture that not only supports its workforce but is fundamental to the Company’s efforts to support the communities that it serves.
−Removed: In an effort to advance these initiatives, the Company’s DEIB priorities include the following:
+Added: Inclusion is a part of the Company’s culture that not only supports its workforce but is fundamental to the Company’s efforts to support the communities that it serves.
+Added: In an effort to advance these initiatives, the Company’s inclusion priorities include the following:
• Maintaining a culture of Belonging through the promotion of inclusion and meaningful connections among Employees;
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• Supporting the Company’s commitment to provide all Employees with equal opportunity for learning and personal growth.
−Removed: The Company provides regular DEIB updates to the Compensation Committee of the Board, which assists the Board with its oversight of human resources policies and practices, and has developed a multi-year training plan to support the cultural competency of the Company's workforce.
−Removed: The Company formed an Executive Advisory Board to review and support the Company's strategies for advancing DEIB throughout the organization.
+Added: The Company provides regular Inclusion and Belonging updates to the Compensation Committee of the Board, which assists the Board with its oversight of human resources policies and practices.
The Company also works with community partners in support of expanded recruiting efforts and continued development of diverse and inclusive talent pipelines.
−Removed: The Company also recently launched a formal Sponsorship and Mentorship Program open to all Employees Companywide and offering opportunities to work toward shared goals.
The Company's motivation is to be a healthy organization where Employees thrive, feel appreciated and valued, and have an authentic sense of Belonging.
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These materials are made available through the Company's website as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC.
−Removed: In addition to its reports filed or furnished with the SEC, the Company publicly discloses material information from time to time in its press releases, at annual meetings of Shareholders, in publicly accessible conferences and Investor presentations, and through its website (principally in its Press Room and Investor Relations pages).
+Added: In addition to its reports filed or furnished with the SEC, the Company publicly discloses material information from time to time in its press releases, at annual meetings of Shareholders, in publicly accessible conferences and Investor presentations, and through its website (principally in its Newsroom and Investor Relations pages).
References to the Company's website in this Form 10-K are provided as a convenience and do not constitute, and should not be deemed, an incorporation by reference of the information contained on, or available through, the website, and such information should not be considered part of this Form 10-K.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.